If you’ve turned on your TV anytime in the last, oh, decade or so, you’ve no doubt been bombarded by ads imploring you to “ask your doctor” about Drug X. And you’re well familiar with the routine: You get treated to happy images of folks dancing, perhaps, or walking their dogs in pretty green meadows, while a soothing voice in the background tells you that Drug X may cause you to lose your ability to drive safely, lose your vision, or lose your mind.

Forgive the exaggeration but you get the picture.

Well, the FDA isn’t pleased with the pharmaceutical industry’s advertising practices. So it’s proposing a new set of rules that would not only limit the ability of drug advertisers to use so many cheerful images, but may indeed force them to place more emphasis on their products’ potential side effects.

The FDA actually proposed the new rules back in 2010. But it re-opened the matter to public comment on January 27, after it published the results from an experiment it sponsored to measure the impact of distraction on consumers’ ability to understand the risks and benefits of drugs being advertised. The rules would pertain to direct-to-consumer (DTC) ads for prescription drugs on television or radio.

The original proposal is rather bulky. But here are the basics of what the FDA is suggesting: The agency wants to amend the rules for DTC advertising to more clearly define the standards for determining whether side effects are presented in a “clear, conspicuous, and neutral manner.” For example, the new guidelines would dictate that the adds cannot include “distracting representations,” such as statements, images, or sounds that might draw the audience’s attention away from those laundry lists of potentially adverse events.

So what exactly makes an ad distracting? The FDA’s proposal doesn’t really spell it out clearly, but you can get a hint of what the agency was thinking in the newly released report on its study, which it titled, “Experimental Evaluation of the Impact of Distraction on Consumer Understanding of Risk and Benefit Information in Direct-to-Consumer Prescription Drug Television Advertisements.” The FDA planned the study to answer a number of questions. Among them: Do visual images that are positive in tone affect viewers’ ability to comprehend the risks inherent in a product? Do positive images influence how people feel about the product? And if the advertiser super-imposes text onto the images—spelling out the side effects—does that change how viewers perceive the product?

All good questions, to be sure. To answer them, the FDA asked 2,000 consumers to go online and watch an ad for a fake blood-pressure drug called Zintria. But the participants didn’t all see the same ad. Some heard the side effects cited while watching “mildly” positive images (rocks, chairs, metal arches), while others saw “strongly” positive images (babies, puppies, girls jumping with beach balls). Some viewers saw the side effects spelled out in superimposed text, while others didn’t.

Not surprisingly, those who watched cute babies and puppies while hearing about the side effects felt better overall about the product than those who watched the more boring images. Both groups, however, understood Zintria’s risks just fine—and they really got it when the side effects were displayed on the screen in clear text, too.

The FDA has published the study on the Web and re-opened the proposed rules to comments, which the public can submit up until February 27 (instructions below).

We here at Xconomy are plenty distracted by the plethora of peppiness in drug advertising. Here are our votes for … Next Page »

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Affymax shocked the world when an FDA advisory committee recommended last month that its anemia drug was good enough to earn a spot on the U.S. market. Now the Palo Alto, CA-based company (NASDAQ: AFFY) is making all sorts of moves behind the scenes that will determine how big a bite it will take out of Thousand Oaks, CA-based Amgen’s multi-billion dollar anemia drug monopoly.

Decisions about the product’s price, who to hire to sell it, and how to negotiate with Medicare and dialysis clinics are all high on the list of tasks facing the Affymax executive team. It’s part of the process of getting ready for March 27, the deadline the FDA has to complete its review of peginesatide, the experimental anemia drug from Affymax and its partner, Takeda Pharmaceuticals. If Affymax can get the green light from the FDA, it will be allowed to sell its product to about 400,000 patients in the U.S. on dialysis treatment, and tap into a market that generated $2.5 billion in sales last year for Amgen’s epoetin alfa (Epogen.)

Medicare has spent tens of billions of dollars on Amgen anemia products over the years, and members of Congress at various points have been critical of how much taxpayer money goes to one company making one drug.

“I don’t want to say there’s pent-up demand, but there’s a lot of interest in the renal community,” in the new product, says Affymax CEO John Orwin. Without disclosing the price, he suggested that Affymax plans to offer a lower-cost alternative. “Healthcare providers are under a lot of pressure to find overall cost-lowering solutions. So we think we’re coming into a favorable environment.”

Given the FDA advisory panel’s lopsided 15-1 vote in favor of its drug, the odds are Affymax will soon be in position to start selling the first alternative to Amgen’s epoetin alfa (Epogen), which has had a monopoly since it was first cleared for sale in 1989. The FDA previously approved a rival from Roche called epoetin beta (Mircera) in 2007, but that drug has been blocked from the U.S. market, at least until mid-2014, because of an intellectual property dispute that Amgen won. Affymax is able to sidestep that minefield because its drug helps stimulate production of oxygen-carrying red blood cells, like Amgen’s, but it is a peptide that is chemically distinct, and works through a different biological mechanism.

Even though Affymax will likely be in position to sell its product soon, it is a classic underdog in this story. Amgen (NASDAQ: AMGN), the world’s biggest biotech company, has contracts in place to provide its anemia drug to Fresenius Medical Care and DaVita, which together control about 70 percent of the dialysis market, analyst Christopher Raymond of Robert W. Baird said in a December 28 note to clients.

Raymond rates Affymax a “buy” with a price target of $13, but he sees many obstacles ahead. Small biotechs often … Next Page »

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Bayer and Onyx Pharmaceuticals looked like they hit gold last fall, when a study of 760 patients showed that one of their new cancer drugs was able to help patients with colorectal cancer live longer.

Today, researchers got the first glimpse at the detailed results, and while it’s encouraging news for the companies and for patients, it’s not exactly something to shout about from the rooftops.

The new drug from Bayer and South San Francisco-based Onyx (NASDAQ: ONXX) showed that it helped patients live a median time of 6.4 months with colorectal cancer that had spread through the body, compared with a median of five months for those in the placebo group. The new drug, regorafenib, had significant side effects like almost all cancer drugs. About 17 percent of patients had moderate to severe skin reactions on their hands and feet, while 15 percent had significant fatigue, and 8 percent had significant diarrhea, researchers said today at the American Society of Clinical Oncology’s gastrointestinal cancer symposium in San Francisco. There was nothing new or unexpected in the drug’s safety profile, scientists said.

Onyx and Bayer have long worked together to co-market sorafenib (Nexavar) as a treatment for kidney and liver cancers, but the relationship was frayed recently by litigation over who owns the second, related compound. The companies settled that dispute in October, in an arrangement where Onyx got a $160 million one-time payment and will get a 20 percent royalty on worldwide sales of the new drug. That royalty stream suddenly looked valuable two weeks later when an independent monitoring committee looked at the data of the ongoing study known as Correct, saw the survival edge, and recommended the study be halted earlier than planned so all patients could get the experimental medicine.

Onyx Pharmaceuticals CEO Tony Coles

Analysts are now projecting regorafenib will be a billion-dollar seller, which could throw off hundreds of millions in annual revenue to Onyx. If the drug wins regulatory approval, it could offer colorectal cancer patients a new option beyond existing drugs like Eli Lilly’s cetuximab (Erbitux), Roche’s bevacizumab (Avastin), and Amgen’s panitumumab (Vectibix). About 52,000 patients in the U.S. are expected to die this year from colorectal cancer, according to the American Cancer Society.

“We’ve shown an improvement in overall survival, which we think is really terrific because these are third and fourth-line metastatic patients who have gone through almost all other available options,” Onyx CEO Tony Coles said in an interview last week at the JP Morgan Healthcare Conference, before the details were released.

Bayer said in a statement today that it plans to seek regulatory approval later this year for clearance to start selling the drug for patients with colorectal cancer that has spread.

Colorectal cancer isn’t the only place where Bayer and Onyx see the new drug potentially being used. The companies are expecting to see results from a pivotal study of 350 patients with gastrointestinal stromal tumors (GIST) before the end of March, Coles says. “Between the colorectal cancer data, and the GIST data to come, regorafenib is clearly on the scene,” Coles says. “The two companies are working together to pursue other indications.”

Few analysts last fall were counting on any revenue at all from regorafenib, so it was a surprising and transforming piece of news for the company. As Coles put it, “we are in position to go from one product for two tumors (Nexavar) to potentially three products with strong data or [an FDA clearance] for seven different cancers by the end of this year,” Coles says. The other drug besides Nexavar and regorafenib is known as carfilzomib, which is being reviewed by the FDA as a new treatment for multiple myeloma.

“When you see that kind of momentum in the business in such a short period of time, it’s unrivaled,” Coles says. “We think the future is very bright.”

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Biotech pilgrims are gathering today for the biggest industry frenzy of the year, the JP Morgan Healthcare Conference. This confab in San Francisco’s Union Square is the singular place each year where essentially all industry mover/shakers—and many wannabes—gather for a marathon week of investment scouting, dealmaking, publicity seeking, job-hunting, and schmoozing.

I’ve been going to this conference for at least seven or eight years (but who’s counting?) and look forward to meeting lots of interesting people and digging up all kinds of news every year. It’s the best time to meet industry players face-to-face, and hear about the latest trends at work, in an action-packed few days. Most everybody here is brimming with optimism—or least putting on their best game face—about how they’re going to make new drugs, devices, or diagnostics that will leap tall buildings with a single bound in the coming 12 months.

Some of these dreams will be fulfilled, but the odds aren’t good. Hope and hype are a couple essential ingredients in this business, and every year both are on display at this conference. Sometimes the wishful thinking can congeal into conventional wisdom. So with that, I thought I’d try to anticipate a few popular myths you can expect to hear circulated, in order to debunk them. Here goes:

1. “The biotech IPO market will pick up.” Every year this line gets repeated, and every year it’s nothing more than wishful thinking. All you need to know about IPOs is that Groupon raised more money in its initial offering last year than the entire class of 2011 biotech industry IPOs. Facebook is on the docket this year, and it will dominate the news. Many biotechs that went public last year were weak, and didn’t perform well for investors, which only serves to dampen enthusiasm. And most importantly, it’s always good to remember who will be spreading the positive word about the IPO market, and consider the sources. It’s the investment bankers, lawyers, and consultants who stand to put a lot of money in their pockets from fees every time one of these transactions occurs. Just because they want it to happen, doesn’t mean it will.

2. “Amgen will make a mondo acquisition.” The biotech industry’s biggest company was sitting on a massive stockpile of $17.6 billion in cash and investments at the end of September. Common sense says that Amgen has got to do something with the cash other than collect interest. Shareholders might like getting dividends or seeing share buybacks to lift the stock price, but this won’t excite anybody for long. The company is getting a new CEO, Robert Bradway, who might be interested in putting his own stamp on the company once he takes over in May from Kevin Sharer, who had a lackluster record in the acquisition department. And Amgen might be feeling the need to compete in the acquisition arms race, especially since Gilead Sciences (NASDAQ: GILD) scooped up Pharmasset for $11 billion.

It may sound logical, but this all feels like wishful thinking to me on the part of bankers with vested interests. Amgen will think long and hard before it attempts to do any monster acquisition, especially after seeing the organizational indigestion mega-mergers have caused in Big Pharmaland (see Pfizer/Wyeth, Merck/Schering-Plough, and Roche/Genentech). My hunch is that Amgen may buy a company in the $1 billion ballpark, but it will not pull the trigger on a really audacious mega-merger in 2012.

3. “The FDA is going to be more supportive of innovation.” I’m not sure how many people are really going to go out on a limb and take the FDA at its word that it wants to be more supportive of medical innovation. But a small group of high-powered VCs and industry advocates have pushed for this for a long time, and commissioner Margaret Hamburg has been making more noises about how the agency’s mission is to ensure the safety and efficacy of new drugs, while also helping stimulate biomedical innovation. Just like anything in politics, though, talk is cheap and the record is … Next Page »

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Alnylam Pharmaceuticals has been saying for a while that it needs hard data from clinical trials to prove its skeptics wrong, and today it’s coming out with an early hint of effectiveness with its RNA interference-based treatment for lowering cholesterol.

Cambridge, MA-based Alnylam (NASDAQ: ALNY) is announcing today that it has gotten some encouraging results from a study of 20 patients who got a single shot of Alnylam’s experimental drug called ALN-PCS. This drug, designed to block the activity of a protein known as PCSK9, was able to reduce the protein by an average of 60 percent after four days when given at the highest of five doses studied. That knockdown of the specific protein translated into an average drop of 39 percent in low-density lipoprotein, the so-called “bad” form of cholesterol that clogs arteries and is known to raise people’s risk of heart attack, stroke and death.

The new drug was well-tolerated at a variety of doses, and no one has dropped out of the study because of side effects, although a mild rash was observed in patients on the treatment, the company said. The study is still ongoing, and Alnylam plans to continue examining the safety of higher doses, but the company is communicating the progress before it’s all wrapped up. Preliminary data is being presented today at the Brigham & Women’s Hospital in Boston, and more details are expected to be presented in the first half of 2012, Alnylam said. The company also plans to discuss the results in more detail on a conference call with investors today at 8:30 am Eastern time.

The data is still from the first of three phases of clinical trials normally required for FDA approval, so this drug still has years of rigorous studies to complete if it is ever going to become a new treatment for lowering cholesterol. But the market for cholesterol-lowering drugs was worth $36.4 billion worldwide last year, according to research firm IMS Health, largely because of the huge success of statin drugs. While many of those drugs are losing patents and facing cheap generic rivals, many big biotech and pharma companies (including Amgen and Sanofi) are focusing on a promising new molecular target in PCSK9, which Robert Langreth of Bloomberg News described in a November feature. Carlsbad, CA-based Isis Pharmaceuticals (NASDAQ: ISIS) also has an anti-PCSK9 product in preclinical development with Bristol-Myers Squibb.

Alnylam is wagering that while other companies are focusing on hitting this protein with genetically engineered antibodies, it will have an effective option that works through RNA interference, which specifically silences the RNA that enables the body to make the PCSK9 protein. If Alnylam can continue to show intriguing data from clinical trials (like it did last fall for a rare condition called TTR amyloidosis), it could help revive some of the enthusiasm for RNAi. Excitement for the technique once ran high because of its new ability to molecular targets that have been considered “undruggable” in the past, but enthusiasm has waned in the past couple years as big companies like Roche and Merck have curtailed their RNAi drug development activities.

The data so far for Alnylam’s PCSK9 program is still quite preliminary. Researchers randomly assigned 20 patients with … Next Page »

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Illinois-based Baxter International (NYSE: BAX) is tapping into Cambridge, MA-based Momenta Pharmaceuticals’ abilities as a generic drugmaker in a new collaboration deal focused on developing so-called biosimilars, or knockoffs of biologic drugs.

Momenta (NASDAQ: MNTA) will receive $33 million upfront in the deal, according to an announcement yesterday, and could receive another $419 million in potential milestones and option fees. The companies will develop up to six biosimilar compounds under the agreement.

Last year Momenta nabbed FDA approval for a generic version of Sanofi’s anti-clotting drug enoxaparin (Lovenox). That product is being marketed by Sandoz. And the FDA is currently reviewing Momenta’s generic form of  glatiramer, a multiple sclerosis drug marketed today by Teva Pharmaceuticals under the brand name Copaxone.

The Momenta-Baxter deal is the latest we’ve reported in a string of activity around biosimilars. Just this week, Thousand Oaks, CA-based Amgen (NASDAQ: AMGN), which has R&D operations in Cambridge, announced a $400 million partnership with New Jersey’s Watson Pharmaceuticals to develop biosimilar cancer drugs. Earlier this month, Weston, MA-based Biogen Idec (NASDAQ: BIIB) and Korean conglomerate Samsung formed a $300 million joint venture focused on biosimilars. And Merck (NYSE: MRK) has been fine-tuning its own biosimilars strategy in preparation for guidelines the FDA is expected to release on how to develop the generic biotech drugs.

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Big drug collaborations and acquisitions took the spotlight in the New England life sciences news pool this week.

—Coronado Biosciences, which moved from New York to Burlington, MA, this past August, debuted on the Nasdaq stock exchange, with an opening share price of $6.50 on Monday. The company (NASDAQ: CNDO) went public not through a conventional IPO, but by registering all of its privately held shares as common stock.

—Cambridge, MA-based Metamark Genetics and Johnson & Johnson unit (NYSE: JNJ) Janssen Biotech inked a research agreement to validate gene targets that play in a role in the spreading and progression of tumors. Metamark will receive an undisclosed upfront payment and is eligible for up to $365 million in milestone payments.

—Thousand Oaks, CA-based Amgen, which has R&D operations in Cambridge, signed a collaboration agreement with New Jersey-based Watson Pharmaceuticals (NYSE: WPI) to develop and sell antibody drugs that are knockoffs of the originals, known as biosimilars. Amgen (NASDAQ: AMGN) will contribute its research and expertise to making the protein drugs that are produced in living cells, and Watson will put as much as $400 million into the development.

—Excelimmune, a Woburn, MA-based developer of so-called polyclonal antibodies, took in $12 million in financing from a private investor that it did not publicly name. The money will go toward developing Excelimmune’s molecules that aim to combat infectious diseases like Staphylococcus aureus (MRSA).

—Cambridge-based Millennium: The Takeda Oncology Company got access to a new portfolio of small molecule cancer drugs that are designed to block variations of the target in cancer biology known as the PI3 kinase pathway. That came through the acquisition of San Diego-based Intellikine by Millennium’s Japan-based parent company, Takeda Pharmaceuticals.

—My colleague Arlene wrote about Enumeral Biomedical, a New York startup founded on science from MIT chemical engineering professor J. Christopher Love. He developed technology called protein microengraving that measures how the human body responds to infection and disease.

—PatientKeeper, a Waltham, MA-based developer of physician workflow software, pulled in another $6 million in growth funding, from Flybridge Capital Partners, New Enterprise Associates, and Whitney & Company.

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This was a great year for Seattle biotech if you measure success through sheer number of acquisitions. But if you prefer to measure the health of an innovation community by the number of exciting new startups it hatches, then this was most certainly a down year.

That’s the mixed bag of returns that I saw when looking back at the news of 2011 from the Seattle life sciences scene. This was the year of the acquisition for Calistoga Pharmaceuticals, Pathway Medical Technologies, Calypso Medical Technologies, SonoSite (NASDAQ: SONO), Amnis, Geospiza, and Pacific Biosciences Labs (the maker of the Clarisonic skin brush.)

While those companies got harvested, not a whole lot of new seeds got planted. The list of notable Seattle biotech startups this year includes Cardeas Pharma, Oncofactor, Blaze Bioscience, Aquedect Neuroscience and Cardiac Insight.

Who else made headlines in Seattle biotech in 2011? Seattle Genetics emerged. Dendreon crashed. Marina Biotech, Omeros, and AVI Biopharma all had years they’d like to forget. Cell Therapeutics somehow managed to stay in business. New leaders emerged at the global health nonprofits, as Alan Aderem moved in to run the Seattle Biomedical Research Institute, Stewart Parker took over at the Infectious Disease Research Institute, and Chris Elias created a vacancy at the top of PATH by leaving for a new gig at the Bill & Melinda Gates Foundation. The foundation’s head of global health, Tachi Yamada, left for a new venture capital gig, and was replaced by a former Novartis executive, Trevor Mundel.

Here’s a company-by-company rundown of the major events at Seattle biopharmaceutical and global health organizations we keep tabs on here at Xconomy. Tomorrow, I’ll follow up with the rundown of rundown of medical device, diagnostic, and others in fields like Bio-IT or Health IT.

Seattle Genetics (NASDAQ: SGEN). This was a transformative year for Seattle Genetics. The company broke through in August by winning FDA approval of its first product, a souped-up antibody for rare lymphomas. The drug validated a new target on the surface of cancer cells, CD30, and provided hard proof that Seattle Genetics’ proprietary chemistry can successfully link toxins to antibodies—a feat that has eluded scientists for 30 years. Big Pharma companies have beaten a path to Bothell to get licenses to the antibody-drug linking technology, and Seattle Genetics has exceeded Wall Street expectations in the early days of its drug rollout.

Dendreon (NASDAQ: DNDN). Dendreon was the star of local biotech in 2010, and this year it fell flat on its face. The company failed to live up to its first full year sales forecast with its immune-boosting drug for prostate cancer, and burned its shareholder base in the process. The company lost more than $3.5 billion in market valuation, and had to cut 500 jobs, largely because it sparked controversy and confusion by pricing its cancer drug too high—at $93,000 per patient. It remains to be seen this year whether Dendreon can pick up the pieces, as the disastrous screw-up of 2011 has created a gaping opportunity for emerging competitors like Johnson & Johnson’s abiraterone (Zytiga) and Medivation’s MDV-3100.

Amgen (NASDAQ: AMGN). The Thousand Oaks, CA-based biotech company, which has significant R&D in Seattle, said at the end of the year that longtime CEO Kevin Sharer … Next Page »

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Geneticist Arthur Tinkelenberg has always been struck by the lack of strategy in scientific research. “Historically it’s been somewhat ad hoc,” he says. “For example, why do we study fruit flies? Because somewhere in the dim past, somebody did something interesting with a fruit fly, and now you have a whole field.”

So when Tinkelenberg was presented with the opportunity to lead New York-based biotech startup Enumeral Biomedical last spring, he jumped at the opportunity. Enumeral is based around technology invented by J. Christopher Love, an associate professor of chemical engineering at MIT who developed a way to measure how the human body responds to infection and disease. Enumeral’s technology, called “protein microengraving,” allows scientists to take cells from people who, say, have survived cancer, and then scrutinize those cells to identify antibodies involved in fighting the disease.

Enumeral’s startup team is marketing the technology as a completely new way to find ideas for innovative drugs—namely by studying real human cells, as opposed to fruit flies, bioengineered mice, or any of the other critters biotech researchers generally use. “We have to find better ways to validate drug candidates, and the way to do that is to start with human-based samples,” Tinkelenberg says.

Although it’s only been around about five months, Enumeral has already piqued the interest of venture capitalists and pharmaceutical companies. It has raised a total of $4.25 million from a group of investors led by Harris & Harris, a New York-based venture capital firm that invests in nanotechnology startups. And Tinkelenberg says the company is in ongoing discussions with potential pharmaceutical partners and hopes to have two to three deals locked up in the first quarter of 2012.

The quest to make drug discovery more human has been a major priority for Big Pharma in recent years. The industry has placed much of its hope in so-called humanized mice, which are rodents that have been engineered to possess fully human immune systems. Scientists expose the mice to human diseases and then extract … Next Page »

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Amgen has spent years defending itself from enemies in the generic drug business, but now the world’s largest biotech company has found a way to join forces with a major maker of copycat pharmaceuticals.

Thousand Oaks, CA-based Amgen (NASDAQ: AMGN), which has R&D operations in Seattle, San Francisco, and Boston, said today it has agreed to collaborate with Parsippany, NJ-based Watson Pharmaceuticals (NYSE: WPI) to develop and sell targeted antibody drugs for cancer that are “biosimilar” knock-offs of the originals. Watson has agreed to pump as much as $400 million into developing the molecules, while Amgen will contribute its specialized expertise and infrastructure for producing these complex protein drugs that are made in living cells.

The companies didn’t say in today’s joint statement which cancer antibody drugs they will attempt to make as biosimilars. But the companies did say that the partnership will not make lower-cost versions of Amgen’s billion-dollar biotech drugs like etanercept (Enbrel) or epoetin alfa and darbepoetin alfa (Epogen and Aranesp). The biosimilar drugs will be sold under a joint Amgen/Watson label, and Watson will receive royalties and sales milestones from product revenues.

Major biotech companies, like Amgen and Genentech, have argued for years that biologic drugs like theirs can’t be copied in the same straightforward manner as conventional small-molecule chemical compounds like those made by traditional drug companies like Pfizer and Merck. Since biotech drugs are incubated inside living cells that are maintained in carefully controlled bioreactors, much of what makes the product unique is the trade-secret protected manufacturing process that isn’t part of the patent that covers the molecule itself. Tiny alterations to this process can lead to fundamental changes in the product itself, which the big companies have argued requires new clinical trials for “biosimilar” products.

Generic companies have countered that new clinical trials would add too much time and expense to the development process, making it impossible for their biosimiliar products to be offered as cheaply and easily as a new generic version of, say, Pfizer’s atorvastatin (Lipitor). The new business model hasn’t really been established yet in the U.S., but other major drug companies, including Merck, have shown interest in biosimilar drugs that presumably would be cheaper than brand-name originals, but more expensive, and more profitable, than conventional generic pills. More recently, Biogen Idec and Samsung have agreed to collaborate on making biosimilar drugs.

“This collaboration reflects the shared belief that the development and commercialization of biosimilar products will not follow a pure brand or generic model, and will require significant expertise, infrastructure, and investment to ensure safe, reliably supplied therapies for patients,” Amgen and Watson said in their joint statement.

Watson is holding a live webcast to discuss the collaboration today at 5 pm Eastern/2 pm Pacific.

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Kevin Sharer will not go down in history as one of biotech’s most successful, or beloved, CEOs. But how well did Sharer really perform during his decade running the industry’s biggest company?

For those who missed it, Thousand Oaks, CA-based Amgen (NASDAQ: AMGN) said last week that Sharer, 63, will be retiring as CEO in May. In a move that didn’t surprise anybody, he will be succeeded by one of his deputies, Robert Bradway, the company’s president and chief operating officer.

Since becoming CEO in 2000, Sharer has lived through the ups and downs that go with the territory in this most volatile of industries. He graced the cover of Forbes magazine in January 2005 for leading the “Company of the Year,” getting credit for revitalizing a long stalled R&D engine. Two years later, Sharer was the industry goat, as Amgen lost $29 billion of its stock market value when safety concerns cast a cloud over its cornerstone products for the treatment of anemia. At various times, Sharer has been slammed in the press for being one of the nation’s most overpaid CEOs, raking in $21.2 million in total compensation last year.

Amgen’s official statement last week noted that the company had $3.6 billion in revenue when Sharer became CEO, and now has revenues approaching $16 billion. Vance Coffman, the chairman of the board’s nominating and governance committee said in the statement that during Sharer’s time, “Amgen grew significantly in every dimension and is well positioned for the future.”

Still, shareholders had little to cheer about the past decade under Sharer. Investors have gotten by with a 0.5 percent annual stock growth during his tenure, according to Bloomberg News. Even after giving in to shareholder demands to boost the stock price via share buybacks, dividends, and cost-cutting, investors have assigned Amgen stock a price-to-earnings ratio of under 15—not exactly a ringing endorsement of wondrous go-go days to come.

Kevin Sharer

I’ve covered Amgen throughout Sharer’s tenure, and have interviewed him several times. While many executives in this industry come from geeky backgrounds in science or medicine, Sharer is a different kind of cat. A graduate of the U.S. Naval Academy, he got some of his formative experience working on nuclear submarines, and later in the telecom industry. He has the tall, upright bearing, silver hair, and poise that make him look like Hollywood’s idea of a Fortune 500 CEO. He also has a forceful voice that seems to contain no doubt, and sounds like it was born to bark orders and instill fear into subordinates.

Sharer seemed to relish the image of himself as a businessman with military discipline. He famously hung a picture of General Custer on his office wall, he has said, to remind himself of the dangers of overestimating his own abilities, and underestimating the enemy. Yet despite his serious and commanding demeanor, he could be charming: I remember him once calling me a few years ago on my cell phone with that piercing voice, “This is Kevin Sharer…” and I thought, “Oh boy, this could be nasty.” Instead, he wanted to let me know he liked something I had just written about Amgen, while also pointing to one line in the story he didn’t like. He ended by saying how he appreciated the interest and coverage of Amgen. Point taken, handled with class.

Evaluating anyone’s performance is an inherently subjective task, but to come away with a grade for how Sharer performed at Amgen, I’ve tried to look at how Sharer performed in some key areas that are important for leaders of all major biotech companies.

Here goes:

Company leadership: A great leader of a biotech company has to surround himself with stars from all kinds of disciplines—research, development, legal, lobbying, marketing, manufacturing. Amgen has long enjoyed a reputation for top-notch patent lawyering and political muscle, but one of Sharer’s most important early moves was hiring former University of Washington immunologist and Merck executive Roger Perlmutter to be his head of R&D. Perlmutter, who is stepping down in February, led a decade-long mission to improve R&D productivity at Amgen. He did have some success, although it will take a few more years to get a final verdict because of the long nature of product development cycles. But even more importantly, a great CEO has to pick a good successor. Bradway joined the company five years ago, has worked his way up from VP of operations, and will take over as CEO after a six-month transition process. Those are good signs that Sharer was smart enough to put an orderly succession plan in place. Most analysts are expecting no big strategic changes under Bradway. Grade: B+

New Product Development: Former Apple CEO Steve Jobs told his biographer that the company lost its way under CEO John Sculley because it focused too much on maximizing profits, and didn’t focus enough on first making amazing products. Sharer’s one big hit in the product development department was … Next Page »

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Wall Street didn’t give Affymax much of a chance at success today in front of an FDA advisory committee, but the Palo Alto, CA-based company clearly proved its skeptics wrong.

Affymax (NASDAQ: AFFY) received a 15-1 positive recommendation from an expert panel of FDA advisors today, who said the benefits of its experimental anemia drug outweigh its risks to the heart. The FDA isn’t required to follow the advice of its advisory panels, although it usually does, especially when the vote is so lopsided in favor of a new product being allowed on the U.S. market.

Many investors wrote off Affymax in June 2010, as I described in a feature as a couple of weeks ago ahead of this important FDA advisory meeting. That’s because a quartet of pivotal clinical trials that enrolled 2,600 patients showed that kidney patients who aren’t yet on dialysis had an increased rate of heart-related serious adverse events—such as heart attack, stroke, congestive heart failure, and death—when they got the Affymax drug instead of the usual treatment from Amgen. About 21.6 percent of patients on the Affymax drug had those serious adverse events, compared with 17.4 percent on the Amgen drug.

But Amgen’s drug has been associated with some well-documented safety issues as well, and Affymax’s drug, peginesatide, showed comparable safety and effectiveness in trials that strictly limited enrollment to patients on kidney dialysis. When the total set of evidence was considered, FDA staff said that some of the patients on the Affymax drug may have had worse outcomes because they were sicker when they entered the studies. The FDA has a deadline of March 27 to complete its formal review of the Affymax drug, and if it gives the green light, then peginesatide will be the company’s first marketed product, and the first drug ever to directly challenge Amgen’s 22-year monopoly in treating anemia of kidney dialysis patients.

Affymax hasn’t yet settled on a pricing strategy for its anemia drug, but CEO John Orwin suggested in an interview last month that his company could be in a position to compete by offering a lower-priced, fewer-hassles, yet highly effective alternative. This will be one of the key dynamics to watch as Affymax gets closer to its FDA decision date, and it will be fascinating to see what Amgen does, if anything, to respond.

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[Corrected: 3:48 pm, 12/7/11] Investors have had pretty low expectations about the prospects for Affymax’s anemia drug, which seeks to challenge Amgen’s 22-year monopoly in the field. But the expectations are starting to rise today, as Affymax approaches its make-or-break moment.

Palo Alto, CA-based Affymax (NASDAQ: AFFY) saw its shares rise more than 20 percent this morning after staff from the FDA posted online briefing documents in advance of an advisory committee on Wednesday. The staff comments were made about peginesatide, an experimental anemia drug Affymax and its partner Takeda Pharmaceuticals hope to market to patients on kidney dialysis. The shares climbed to $6.34, up about 20 percent, at 10:19 am Eastern time.

Many investors wrote off Affymax in June 2010, when the company announced the results from a quartet of pivotal clinical trials that enrolled 2,600 patients. The studies showed that kidney patients who aren’t yet on dialysis had an increased rate of heart-related serious adverse events, such as heart attack, stroke, congestive heart failure, and death, when they got the Affymax drug instead of the usual Amgen treatment. About 21.6 percent of patients on the Affymax drug had those serious adverse events, compared with 17.4 percent on the Amgen drug.

Affymax, however, went ahead with its application to the FDA, saying the safety profile of its drug appeared similar to the Amgen drug in the sicker population of kidney dialysis patients. Today’s FDA document raises the safety concern about the Affymax drug, but does so in a balanced way that provides some context about well-known safety issues with Amgen’s drug as well. The FDA noted that while Affymax’s drug appeared worse “numerically” in the pre-dialysis population, there wasn’t a statistically significant difference between it and the Amgen drug.

The FDA also noted that despite efforts to randomly assign patients to one drug or the other in the trial, patients who were sicker at the start ended up getting the Affymax drug, putting it at a disadvantage.

Given that context, the FDA staff said it plans to ask the advisory committee not just for its opinion about Affymax’s drug for dialysis patients, but for the potentially larger group of patients that have chronic kidney disease that doesn’t yet require dialysis.

“FDA is asking the committee’s advice about the benefit risk profile of peginesatide for patients with CKD [chronic kidney disease], given the safety findings and in light of the prior history with agents that stimulate the erythropoietin receptor,” the FDA staff said.

FDA briefing documents can often be harsh toward new products, but the early read of the Affymax documents was positive on Wall Street. “We believe the probability of approval for the dialysis indication is high and that the FDA may have left the door open to approval” in the pre-dialysis population, said William Tanner, an analyst with Lazard Capital Markets, in a note to clients this morning. His comment was reported earlier today by Bloomberg News.

The FDA’s Oncologic Drugs Advisory Committee will review the evidence presented by regulators and Affymax at a meeting on Wednesday. [Corrected FDA deadline] The FDA has a deadline of March 27 to make its decision on whether to allow the Affymax drug on the U.S. market.

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We’re less than two weeks away from our biggest Seattle biotech event of the year, “The Immunex Impact” on Dec. 1. As part of this event, I’ve enlisted a number of well-known veterans of Immunex—Dave Urdal, Stewart Parker, Steve Graham, Janis Wignall, Doug Williams and Patricia Beckmann—to share one of their favorite stories about the region’s pioneering biotech company.

I don’t know what these people are planning to say, but I’ve encouraged them to keep their stories short and sweet—in the one-to-two minute range. So to give you a sense of what I’m aiming for, I thought I’d offer up an Immunex vignette of my own:

“It was December 2001, and my wife and I had been burning the candle at both ends for a couple months at The Seattle Times in the aftermath of 9/11. We decided to go really far away—to New Zealand.

It was a great trip. We trekked all over, and I never touched a newspaper or checked out the news online for two weeks. I really felt like my batteries were fully recharged on the flight home, where we connected at LAX.

But there, I felt my heart skip a beat. It was when I stopped by the airport newsstand and picked up a copy of the LA Times. There, to my utter dismay, was a story at the top of the Saturday business section, quoting unnamed sources, saying that Amgen was about to acquire Immunex for $16 billion.

My first thought: Why me? I had only been on the biotech beat for the Seattle Times about six months, and here I was getting scooped on the biggest possible story in my coverage area. The LA Times had sources at Amgen, and in those days, I didn’t. I feared that I was totally screwed. It was Saturday evening by the time I was scheduled to get home, and the Sunday paper would have already been put to bed. The best I could do was get my butt back to the office on Sunday, start calling people at home to confirm the news, and try to put it in context.

I’m sure my editors at the time were somewhat amused by my eagerness—nobody expected me to come in on Sunday on the tail end of my vacation. But I did. I confirmed the news, and even got some fresh comments for a front page story in that Monday’s Seattle Times, Dec. 17, 2001. The story was timed to coincide with the press release formally announcing the deal. Editors at the paper seemed pretty happy with it. I wouldn’t say I was pleased with it, but I had at least done the best I could. And I knew there were a lot more questions to ask in the months ahead.”

So that’s my Immunex remembrance. It’s 360 words, and it took exactly two minutes to say it out loud in a practice run. I’m really looking forward to hearing similar anecdotes from this all-star cast of insiders. We have more than 185 people registered at this point, and there’s not much room left at the Institute for Systems Biology, so if you plan to come, I’d encourage you to get tickets soon. See you there Dec. 1.

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Take one look at Affymax’s stock chart and you’d never guess the most important day in its history, a classic make-or-break moment, is coming up Dec. 7. It looks like nobody is giving the company a snowball’s chance in you-know-where to succeed.

The big event coming up for Palo Alto, CA-based Affymax (NASDAQ: AFFY) will be on Dec. 7 when an advisory committee to the FDA will meet. The panel will weigh the risks and benefits of Affymax’s peginesatide as a new anemia treatment for patients on kidney dialysis. If the panel likes what it sees, and the FDA ultimately clears the product for sale by its March 27 deadline, then the company could start marketing its first drug in the U.S. If that happens, Affymax will be in position to fight for a share of a $2.5 billion dollar annual market, and it will be the first direct challenger in the U.S. to a 22-year-old monopoly held by Thousand Oaks, CA-based Amgen.

Amgen is the big guy in this story, the world’s most valuable biotech company with a market valuation of about $49 billion. Affymax, with a stock price of $4.89 at yesterday’s close, is a relative pipsqueak, worth about $175 million. Given that Affymax had about $116 million in the bank at the end of September, investors are basically saying the company’s technology is only worth a piddling $60 million—hardly an expression of confidence that it’s about to wrestle away market share from Amgen. And even though Affymax’s stock is already low at below $5, an increasing number of investors are betting that Affymax will fall further, according to data on short-selling compiled by NASDAQ.

Affymax CEO John Orwin, who started at the company in January, isn’t making any predictions, but he says the efficacy of his company’s drug is “well-established” and that his team is ready to field questions about the safety of its drug candidate. “This was the largest and most comprehensive clinical trial program ever done,” in this class of anemia drugs he says.

Affymax CEO John Orwin

Most investors wrote off Affymax in June 2010, when the company announced the results from a quartet of pivotal clinical trials that enrolled 2,600 patients. The studies showed that kidney patients who aren’t yet on dialysis had a increased rate of heart-related serious adverse events, such as heart attack, stroke, congestive heart failure, and death, when they got the Affymax drug instead of the usual Amgen treatment. About 21.6 percent of patients on the Affymax drug had those serious adverse events, compared with 17.4 percent on the Amgen drug. Affymax stock crashed immediately, and hasn’t recovered.

Making matters worse, regulators have been on high-alert for years about serious adverse events with anemia drugs. Amgen suffered through its worst year ever in 2007, losing $29 billion in market value, as studies showed heart risks associated with its anemia drugs when used in high doses. That damaging information emerged as Affymax was beginning its quartet of clinical trials. The new evidence about the Amgen drugs prompted the FDA to insist on a rigorous set of studies that were designed to look for heart troubles from the start—unlike other studies which discovered heart trouble through retrospective analysis, which can introduce bias into clinical results.

Given the heightened anxiety at the FDA about heart risks with anemia drugs, many investors obviously concluded that Affymax’s drug would be dead on arrival. But Affymax, and its partner Takeda Pharmaceuticals, have continued their push to bring the new drug to the market.

The reason, Orwin says, is that when you look … Next Page »

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Are biotech and pharma companies doing well, or falling apart at the seams? People will have differences of opinion on this, but one thing is clear: it’s all relative.

At a speech to a trade group in Philadelphia last month, James Greenwood, president of the biotechnology trade group BIO, asked the government to stop picking on the pharma industry. “The drug industry has laid off more workers than the auto industry, but they get bailed out while we’ve continued to get picked on,” he declared. Unfortunately, Greenwood’s comparison of the auto and BioPharma industries was well meaning but seriously misguided. I looked up the profitability of the Big Three auto companies and compared it to three of the largest, US-based pharma companies over a five-year period.

Here’s the data, on yearly profits or losses, in billions of dollars. Losses are expressed in parentheses, and the * indicates results following bankruptcy.

Which industry do you think has had the rougher time in the past five years?

Big pharma and the auto industry are both dominated by multi-national corporations that employ huge numbers of people. Both industries have a high cost-of-entry barrier that limits competition. And it’s also true that both the auto industry and big pharma each laid off hundreds of thousands of workers in the past few years. In the auto industry, however, the largest layoffs were focused on the people who actually built the cars. In contrast, big pharma didn’t lay off the people who make the drugs; they primarily laid off the folks who created, marketed, and sold their products. I point this out to illustrate that gross comparisons between the auto industry and pharma, are, well, rather meaningless. The two industries aren’t really comparable in a large number of ways. People die if they can’t get certain medicines, but I never heard of someone passing away because they couldn’t get a new Chevy.

Despite their recent setbacks, Big Pharma companies are still making money … Next Page »

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Did you know that an Immunex employee once ended up swimming with the otters at the Seattle Aquarium during a company holiday party? Or that Immunex executives once mocked an uptight Big Pharma partner from Wayne, NJ by producing a video spoof on “Wayne’s World,” the comedy sketch from Saturday Night Live?

Yes, these are the same goofballs who created a $7 billion-a-year drug for autoimmune diseases and established Seattle as one of the top handful of biotech hubs in the world.

I’ve been digging up a lot of fun stories from Immunoids to prepare for the next big Xconomy Seattle event, “The Immunex Impact” on Dec. 1. We have more than 150 people registered from all over the biotech community—both Immunex alumni and non-alumni—for what will be a truly special event.

As we get ready for the big event, I thought it would be fun to put together a little trivia quiz. If you’d like to participate, just send your answers to ltimmerman@xconomy.com with “Immunex Trivia Quiz” in the subject line, and your answers in the body of the email. I’ll plan to announce the winner in person at “The Immunex Impact” and will hand over a surprise piece of Immunex memorabilia as the prize.

Have fun!

1. What was Immunex’s all-time high stock price, adjusted for splits? Hint: It came in March 2000.

A. $83.60

B. $77.32

C. $111.81

D. $167.47

2. What year did Immunex win FDA approval for Enbrel?

A. 1996

B. 1998

C. 1999

D. 2000

3. Who were the so-called “Three Amigos” on the early Immunex executive team?

A. Steve Gillis, Chris Henney, Steve Duzan

B. Ed Fritzky, Peggy Phillips, Doug Williams

C. Steve Gillis, Michael Kranda, Alan Frazier

4. How much did Enbrel sell in its first full year on the U.S. market?

A. $150 million

B. $258 million

C. $632 million

D. $367 million

5. In 1995, American Home Products made a hostile takeover bid for Immunex when the stock price was at $12 a share. What did AHP (later called Wyeth) offer?

A. $14

B. $16.50

C. $19

D. $17

6. What did Ed Fritzky famously do with his Porsche while getting an update about how the Enbrel team performed at an FDA advisory committee?

A. Got into a fender-bender

B. Drove off with a gas station nozzle stuck in his tank

C. Blared the horn loud enough to alert nearby police

D. Got a speeding ticket

7. True or False: Immunex researchers once collected urine in company bathrooms for scientific purposes

A. True

B. False

8. Which of the following nicknames were occasionally used to refer to Immunex?

A. Immunex University

B. The Lazy I

C. Cytokines R’Us

D. All of the above

9. How many employees did Immunex have in Washington state at the time of the Amgen acquisition agreement in December 2001?

A. 1,200 … Next Page »

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All this talk about quarterly earnings and venture stats reminded me: I never posted my favorite stories from Xconomy Boston’s third quarter.

Yes, I know it’s almost the end of October, and the third quarter ended a month ago. I must have been traumatized by the collapse of the Red Sox or something (is baseball still going on?). Go ahead, run me out of town like Theo and Tito.

This time, I’m not consulting with my colleagues. I’m a rebel, a maverick. I work alone. Without further ado, here are my favorite stories from July through September:

Top 10 Tech Stories:

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Chronically bad unemployment is the biggest story in the U.S. today, and we had some more bad news about jobs being lost this week in Seattle biotech. But there were a few other good things to report, including a story about a new company being born.

—Amgen (NASDAQ: AMGN), the Thousand Oaks, CA-based biotech giant, said this week it is cutting 380 jobs companywide from its R&D operations, which includes 70 people at its sites in Seattle and Bothell, WA. The company plans to say more about the cutbacks Monday on its quarterly financial conference call.

—GlaxoSmithKline made big news in Seattle this week at the Bill & Melinda Gates Foundation‘s malaria forum. The story was about how GSK’s experimental malaria vaccine, supported by the Gates Foundation through the PATH Malaria Vaccine Initiative, was found to protect about half of African children in a Phase III clinical trial. But there’s an elephant in the room about vaccine cost that nobody is really discussing thoroughly in public.

—The latest biotech startup in town has officially spun out of the Fred Hutchinson Cancer Research Center. The company, called Blaze Bioscience, has raised its first $725,000 in angel financing and recruited former ZymoGenetics dealmaker Heather Franklin as its CEO. The idea, from the lab of researcher Jim Olson, is to “paint” tumors so that surgeons can make sure they get rid of the whole tumor, and not leave behind straggler cells that can lead to a recurrence.

—I’ve had Immunex on the mind lately as we prep for our next big Xconomy life sciences event, “The Immunex Impact“ on Dec. 1 in Seattle. Yesterday, I invited Immunoids to bring some old photos and company memorabilia to the event. I also announced the newest addition to the lineup of speakers—Patricia Beckmann. She will join Steve Gillis, Chris Henney, Doug Williams, Stewart Parker and others in this special confab of Immunex alumni. And speaking of Henney, he was honored this week with a biotech “Hall of Fame” award at an annual industry event in Laguna Niguel, CA.

—Bothell, WA-based Marina Biotech (NASDAQ: MRNA) has been running low on cash lately, but it found some support this week from a single investor who agreed to put as much as $15 million into the company over time.

—From the medical device side of town, we had a couple stories about companies going in opposite directions. Kirkland, WA-based Pathway Medical Technologies, acquired in August by Bayer’s Medrad unit, has allowed a lease extension option to expire on its headquarters, suggesting that it may not be interested in keeping operations in Seattle. On a more positive note, Redmond, WA-based Mobisante talked about how it has received more than 300 sales leads for its ultrasound-on-a-smartphone, even before it’s really ready to capture much of the market for this low-cost diagnostic tool.

—I know people have heard a lot of song and dance about genomics revolutionizing healthcare, and the reports have been greatly exaggerated to date. But in this week’s BioBeat I took a moment to marvel at the truly amazing kinds of experiments that are now feasible as scientists have learned how to sequence entire human genomes for $4,000 or less, in a matter of weeks. I’m going to explore this further next Monday at our next event in San Francisco, “Computing in the Age of the $1,000 Genome.”

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Word came out of Amgen last week that it was looking to overhaul its R&D operations, and today the biotech giant confirmed the overhaul is translating into job cuts for 380 people across the company.

Thousand Oaks, CA-based Amgen (NASDAQ: AMGN) notified 380 employees internally today that their jobs are being eliminated as part of the company’s effort to improve focus and re-allocate R&D resources, according to company spokeswoman Mary Klem. Amgen isn’t closing any of its research sites around the world, but people are being laid off at its major U.S. R&D sites in Thousand Oaks, Seattle, San Francisco, and Boston, Klem says.

No sites are being closed, and Amgen isn’t eliminating any therapeutic areas from its research portfolio, she says. Amgen plans to discuss the cuts in some more detail next Monday on its quarterly financial conference call, she says.

“We will continue to invest significantly in R&D,” Klem says. But she added the company needs to shift resources around to support more expensive late-stage development projects. “We will continue to allocate resources in a focused manner,” she says.

Amgen generated about $15.1 billion in revenue last year, and spent what’s generally considered a healthy 19 percent proportion of that revenue ($2.9 billion) on R&D. The company is actively pushing the biggest new innovations from its internal pipeline in years—denosumab, marketed for osteoporosis patients as Prolia, and for cancer-related bone loss as Xgeva. The company has had as many as 20,000 employees in the past, but its latest worldwide headcount is down to about 17,000, according to a recent company fact sheet.

Amgen’s full-year profit was $5.02 billion in 2010, essentially flat compared to $5.01 billion the prior year. In the most recent quarterly report, Amgen said its profits declined about 3 percent compared with the same period a year ago.

Klem didn’t say how much the company expects to save by making the cutbacks.

Here’s the breakdown of job losses at each major Amgen site, according to Klem.

—Thousand Oaks, CA (226)

—Seattle/Bothell, WA (69)

—South San Francisco (37)

—Cambridge, and Woburn, MA (32)

—United Kingdom (the remainder, about 15)

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