Vertex Pharmaceuticals went from king of the hill in the treatment of hepatitis C to yesterday’s news in about six wild months. But while many on Wall Street say Vertex’s big drug will soon become obsolete, Vertex and its small partner in South San Francisco have quietly put themselves in position to defend a big share of this future multi-billion dollar market.

Cambridge, MA-based Vertex (NASDAQ: VRTX), which has significant operations in San Diego, is running a series of small clinical trials this year that will mix and match combinations of antiviral medicines against hepatitis C. These trials will help determine whether Vertex and its partner, South San Francisco-based Alios Biopharma, have hit upon a combination of drugs that can raise the cure rate, and reduce side effects, for millions of patients with this liver-damaging virus.

While Vertex’s new drug has been a huge step forward in the past year, the ultimate way to fight the fast-mutating virus, many scientists believe, will be by putting together a cocktail of antivirals that attack hepatitis C from multiple angles like with HIV.

“There isn’t one magic pill that will solve the problem,” says Vertex CEO-to-be Jeff Leiden. “It’s clear the HCV space will evolve into different combination treatments for different patients. It’s not yet clear what the best combination is going to be. What you want is to have the component parts in your company so you can put them together.”

Vertex's Jeff Leiden

The hepatitis C world saw dramatic upheaval in the past year as researchers learned more about antivirals in development. Vertex won FDA approval in May for its new protease inhibitor, telaprevir (Incivek), which doubled the cure rate to about 80 percent for new patients when given in tandem with standard pegylated interferon alpha and ribavirin. About 25,000 people rushed in to get treated with the new combo regimen in its first seven months on the market, generating hundreds of millions in cash flow per quarter for Vertex, and pushing it into the black.

Exciting as it all was for physicians, patients, and Vertex shareholders, the company was soon upstaged. Researchers have long been looking for a way to get rid of the injectable interferon part of the regimen, which causes nasty flu-like symptoms that people must endure for months. To go beyond combo therapies (like the one from Vertex and another from Merck that include injectable interferon), the next step is to hit the hepatitis C virus with not just protease inhibitors, but also drugs from other classes—nucleotide polymerase inhibitors, and non-nucleotide polymerase inhibitors.

Princeton, NJ-based Pharmasset (NASDAQ: VRUS) stole the show last November at the American Association for the Study of Liver Disease when it said its nucleotide polymerase inhibitor cured all 40 patients with certain hepatitis C genotypes in a small study—a result that led to its $11 billion acquisition by Foster City, CA-based Gilead Sciences (NASDAQ: GILD). A few weeks later, another maker of drugs in that class, Alpharetta, GA-based Inhibitex (NASDAQ: INHX), got bought by Bristol-Myers Squibb for $2.5 billion. Separately, Bristol-Myers Squibb released some more promising clinical results from its own pipeline just last week.

Those developments got everyone talking about a new paradigm in hepatitis C, which many on Wall Street believe will leave Vertex in the dust. Jason Kantor, an analyst with RBC Capital Markets in San Francisco, said in a Dec. 19 note to clients that “the consensus view is that Vertex’s HCV franchise will essentially go to zero beyond 2015.” Vertex stock has dropped almost 40 percent in the past year, down from its 52-week high of $58.87 to $35.86 at yesterday’s close.

While Leiden has spent much time talking with investors about Vertex’s other drugs in development—particularly one expected to hit the market this year for cystic fibrosis—he says the company isn’t about to surrender in the hepatitis C market. He has a plan intended to allow Vertex to compete beyond 2015, when the first all-oral, interferon-free regimens are expected to could come along and replace today’s standard of care.

Sometime before the end of March, Vertex expects to see results from an early-stage study of an all-oral combo regimen of telaprevir (a non-nucleotide polymerase inhibitor called VX-222 that it acquired from a Canadian company in 2009) and the usual ribavirin. If Vertex can cure about 75 percent to 80 percent of patients with this cocktail, and reduce side effects by eliminating interferon, Leiden says the company would be ready to go to pivotal clinical trials this year with its own all-oral combination.

“If we can do that, it will be a very exciting result. If you take that regimen into pivotal trials, now we’re talking about 2014 to finish those trials,” Leiden says.

And that isn’t the only combo Vertex has in mind. Within weeks … Next Page »

Comments (1) | Reprints | Share:          

Cambridge, MA-based Alnylam Pharmaceuticals is getting rid of about one-third of its workforce, as it looks to save cash for clinical trials that it hopes will prove the value of its RNA interference drug technology.

Alnylam (NASDAQ: ALNY) said today it’s cutting 33 percent of its staff, as it looks to concentrate its cash reserves on what it believes are its “highest value opportunities” in its pipeline of experimental RNAi drugs. The company didn’t disclose absolute numbers, but it said in its most recent quarterly report that it had 171 employees at the end of September, so if that number is still current, then 56 people are being let go, and about 115 people will remain at the company.

Alnylam has faced deep skepticism among investors in its RNAi platform, after scientists have struggled to effectively deliver the treatments into cells, and Big Pharma companies like Roche, Novartis, and Merck all scaled back their efforts in the field. But Alnylam, still relatively flush with cash from partnerships it struck years ago, has chosen to forge on by internally developing its own RNAi drugs for a group of liver diseases, where delivery is less of a challenge.

“As we effect our ongoing transformation from a platform company to a product company, now is the time to focus our near-term efforts and resources on what we believe to be our highest value opportunities,” said Alnylam CEO John Maraganore, in a statement.

Alnylam said the cuts are expected to save the company $20 million in cash this year. It ended 2011 with about $260 million of cash and investments in the bank, and said it plans next month to disclose its financial forecast for the coming year.

Alnylam has recently released some preliminary data from clinical trials of a couple RNAi programs that it says have emboldened it to push ahead and become a drug developer on its own. The first is for a rare liver disease called TTR amyloidosis, and the second is for high cholesterol, through hitting a biological target known as PCSK9. The company said today that as part of its restructuring, the TTR program, and another for hemophilia, are now its top two clinical priorities.

This isn’t the first time Alnylam has made layoffs. The company cut 25 to 30 percent of its workforce in September 2010 after Novartis ended a collaboration with the company.

Comments | Reprints | Share:          

Clinical trial results and drug collaborators made up the New England life sciences news this week.

—New Jersey-based drugmaker Merck announced backing a few Boston-area companies in the past few weeks. Its Global Health Innovation Fund led a $10 million financing for Cambridge, MA-based Daktari Diagnostics, a developer of technology for testing small quantities of blood and other fluids that it hopes can monitor HIV patients in the developing world. And Merck pledged $17 million to Marlborough, MA-based Physicians Interactive Holdings. The company will put the money towards developing its online and mobile tools to connect doctors and pharmaceutical companies.

—An experimental drug from Cambridge-based Alnylam Pharmaceuticals (NASDAQ: ALNY) helped lower so-called bad cholesterol by an average of 39 percent at the highest dose studied in a small clinical trial.

—Aveo Pharmaceuticals (NASDAQ: AVEO) of Cambridge said it met it goals in a clinical trial called TIVO-1 of its experimental drug for treating kidney cancer. In the study of 517 patients, Aveo’s tivozanib was able to keep tumors from spreading a median of 11.9 months, compared with 9.1 months for another drug in its class from Bayer and Onyx Pharmaceuticals. It was a narrow victory, though, as the trial’s goal was to show the Aveo drug kept tumors from spreading about an extra three months.

—Weston, MA-based Biogen Idec (NASDAQ: BIIB) said it will pay Carlsbad, CA-based Isis Pharmaceuticals (NASDAQ: ISIS) up to $299 million for collaborating on a treatment for a spinal muscular atrophy, a rare disorder found in newborns.

—Inspiration Biopharmaceuticals moved into its new digs in Kendall Square, after more than seven years of operating as a virtual biotech company that’s pursuing hemophilia treatments. It was founded by hedge fund manager John Taylor and Scott Martin, a Texas energy veteran whose son has hemophilia.

—The founders of Sermo, a Cambridge-based provider of an online community for doctors, are moving on to a new spinoff called par8o, the online publication Pharmalot reported. CEO Daniel Palestrant and chief medical officer Adam Sharp say on the par8o website that the new company will be focused on more efficiently connecting doctors and patients.

—Watertown, MA-based Forma Therapeutics inked a deal with Germany-based Boehringer Ingelheim that provides $65 million in upfront cash and four years of R&D support for discovering cancer drugs. Forma, which now has seven partnerships with heavy hitters, could also get potentially $750 million more from Boehringer Ingelheim as the cancer drugs move through development.

Comments | Reprints | Share:          

Marlborough, MA-based Physicians Interactive Holdings announced today that it has formed a deal with Merck Global Health Innovation Fund, a unit of the Whitehouse Station, NJ-based drug giant. Merck (NYSE: MRK) has pledged $8.5 million up front and another $8.5 million in milestone payments to Physicians Interactive, which was founded in 2008 and makes a range of mobile and Web-based tools for healthcare professionals and life sciences companies.

The company will use the money to further the development of four product lines: digital marketing tools, data analytics, online platforms for selling drug samples, and mobile products such as MedAlert—a service that sends news, research updates, and drug information to doctors’ cell phones. Donato Tramuto, CEO of Physicians Interactive, says the funding will also help the company explore new market opportunities.

This marks the second large financing of a Boston-area company by Merck in the last month. In December, Merck led a $10 million funding of Cambridge, MA-based HIV diagnostics developer Daktari. Merck’s $250 million Global Health Innovation Fund was set up in 2010 to fund startups pursuing several health-related endeavors, including health informatics.

Comments | Reprints | Share:          

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 »

Comments (1) | Reprints | Share:          

Cambridge, MA-based Daktari Diagnostics announced in late December that it has raised $10 million in financing from a syndicate of private and venture firms. The funding round was led by Merck Global Health Innovation Fund, a unit of Whitehouse Station, NJ-based Merck (NYSE: MRK). Also participating in this funding round were Daktari’s existing investors, Norwich Ventures and the Partners Innovation Fund.

Daktari’s technology can analyze small quantities of blood and other fluids. The company developed a cell-counting system that’s portable and doesn’t require the lenses, cameras, or filters commonly used in other diagnostics systems. The company says it will use the recent funding to market its first products, which are designed to monitor patients with HIV.

Merck Global Health Innovation Fund was founded in 2010. According to its website, the $250 million fund fosters startups in six key areas, including health informatics and analytics, heath intervention, and “health productivity enablers.”

Comments | Reprints | Share:          

A decade ago, when newspaper and magazine editors prepared their rundown of the year’s most important news stories, they really were just choosing the articles that they thought had the most impact. That was old media.

Today, everything is measured and anything can be quantified—at least on the Internet. In cyberspace, people vote with their clicks, and my list of the top 10 stories of 2011 is based on the stories posted on the Xconomy San Diego website (from Jan. 3 through Dec. 23) that attracted the most traffic. That’s new media.

And a new year is beckoning, so it’s out with the old and in with the new.

Believe it or not, some stories published before 2011 still pulled in a lot of interest over the past year. For example, one of the top stories of 2011 was a post I wrote two years earlier about the pervasive skepticism voiced by biofuels industry leaders during the 2009 Algae Biomass Summit in San Diego. It also is noteworthy, although perhaps no surprise, that a 2009 post I wrote about the first human trial of San Diego-based Histogen’s hair regrowth treatment continues to attract readers who are Googling for news about baldness and hair restoration.

The No. 1 story of 2011, however, was surprising—at least to me. It was a commentary about the dramatic changes underway in new treatments for hepatitis C by San Diego Xconomist Steve Worland, the CEO of San Diego-based Anadys Pharmaceuticals. Worland alludes to the spate of new product introductions by Merck and Vertex, and predicts an increasing number of direct acting, cocktail-type antiviral drugs. It’s a hot topic, although Wall Street’s interest might have been piqued as analysts and traders searched to understand why Roche acquired Anadys for $230 million about five weeks after we published Worland’s op-ed.

It’s also worth noting that these high-traffic stories tend to occur in … Next Page »

Comments (1) | Reprints | Share:          

Ever since Xconomy added New York to its stable of cities on April 1, we have found plenty of companies to write about that are making waves in tech, biotech, and cleantech. We’ve met tech entrepreneurs who’ve caught the fancy of New York’s thriving venture capital scene, and scientists in the bowels of Big Pharma laboring to invent the next blockbuster drugs. We’ve visited with CEOs in the rapidly growing biotech sector in and around NYC, and profiled so many new startup incubators we’ve lost count of them all.

To wrap up our first (partial) year in the Big Apple, we’re counting down the top 10 Xconomy topics, as measured by traffic. Why topics as opposed to stories? You’ll have to read all the way to the end to find out.

Our most popular topics of the year were….

10. Arno Therapeutics
Arno (OTCBB: ARNI), based in Parsippany, NJ, is what’s known as a “virtual biotech,” because it’s developing three drugs with just a handful of full-time employees who outsource almost every step of the research and development process. But it’s a mighty qualified handful—Arno is staffed by veterans of Johnson & Johnson, Pfizer, and Medimmune.

9. IncubateNYC
When New York’s leaders put out a request for proposals for a tech incubator in Harlem, entrepreneurs Marcus Mayo and Brian Shields responded with IncubateNYC, a multifaceted plan to bring technology startups to an area of the city that could use an economic revival.

8. BioLeap
The pharmaceutical industry is desperate for new technology to improve drug discovery. Pennington, NJ-based BioLeap believes it has a solution in a tech platform designed to predict how tightly experimental drugs will bind to their disease targets.

7. Lenddo
What do you get when you combine social media with financial services? Lenddo believes you get a great way to market small loans to the developing world’s emerging middle class.

6. Delcath
NYC-based medical device maker Delcath Systems (NASDAQ: DCTH) has endured endless hassles from the FDA over its drug-device combo to treat liver cancer, and investors have been bailing out … Next Page »

Comments (2) | Reprints | Share:          

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.

Comments | Reprints | Share:          

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.

Comments | Reprints | Share:          

Obesity is one of the biggest public health problems of the 21st century, and now a Boston biotech startup is looking to fight it in an unorthodox way. The bet at Ember Therapeutics is that it can coax the body to burn off some of that unwanted fat.

The company is emerging from stealth mode today with a $34 million Series A financing from Boston-based Third Rock Ventures. The idea is to make drugs that take advantage of some of the new understanding about “brown fat,” a type of tissue that helps mammals to burn off the more familiar “white fat” tissue that stores excess energy. The company has recruited some big name advisors from the brown fat field, including Bruce Spiegelman of the Dana-Farber Cancer Institute, Patrick Griffin of The Scripps Research Institute in Florida, and Ron Kahn of the Joslin Diabetes Center.

Ember (not to be confused with the Boston wireless sensor network firm with that name) is being born during a rough time for the obesity drug business, as public companies like Arena Pharmaceuticals (NASDAQ: ARNA), Orexigen Therapeutics (NASDAQ: OREX), and Vivus (NASDAQ: VVUS) have all failed to win FDA approval for new weight loss drugs. Regulators have often cited underwhelming effectiveness, along with various safety concerns for pills that have potential to be taken by millions of people with a condition that isn’t immediately life-threatening. But obesity does lead to a wide variety of expensive, chronic health problems like diabetes, heart disease, arthritis, and depression. The potential market for an effective new weight loss drug is huge, as an estimated one-third of U.S. adults are obese and another one-third are considered overweight.

Lou Tartaglia

Third Rock’s bet is that it can come up with a more effective alternative through this new biology that seeks to help people burn off excess calories, rather than more traditional approaches that seek to work on the central nervous system by suppressing appetite.

“We can’t wait to get going,” says Third Rock partner Lou Tartaglia, the interim CEO of Ember.

Scientists have long known that newborns have a lot of brown fat, which is loaded with mitochondria that expend energy, and release heat to keep them warm. Most of this tissue disappears as people grow up, and adults begin to accumulate more “white fat” which stores excess energy from food we eat. But recent discoveries using positron emission tomography (PET) scans have shown that adults do retain some small amounts of brown fat tissue (usually along the back) which sends signals to burn excess white fat, Tartaglia says.

What’s interesting from a pharmaceutical perspective is that scientists have now identified biologic pathways that suggest it could be possible to “recruit and augment” the brown fat tissue that’s already operating in the body, Tartaglia says. Ember, which takes its name from … Next Page »

Comments (1) | Reprints | Share:          

At an R&D and business briefing meeting that Merck (NYSE: MRK) held for Wall Street analysts at its Whitehouse Station, NJ, headquarters in November, the drug giant generated quite a bit of buzz for a drug that’s still several years away from market. That’s because the drug, called MK-8931, may offer a completely new way to attack Alzheimer’s disease—one of the hottest and most challenging targets in drug development. “We think this is the molecule that will provide the best option for Alzheimer’s patients,” declared Peter Kim, president of Merck Research Laboratories, during a Q&A with analysts towards the end of the meeting. It was a bold statement, considering the fact that the drug has so far only been tested in healthy volunteers.

But the results seen in that one small trial were enough to persuade Merck’s scientists to forge ahead and test MK-8931 in Alzheimer’s patients. The drug targets an enzyme known as BACE (beta-site APP cleaving enzyme), which generates proteins that in turn lead to the formation of amyloid plaques—the brain deposits thought to cause the cognitive impairments that are the hallmark of Alzheimer’s. In the trial, a once-daily dose of MK-8931 taken by mouth lowered levels of the amyloid-forming protein by more than 90 percent, with no significant side effects.

Scientists at universities and drug companies around the world have spent much of the last decade trying different methods for blocking BACE—to little avail. When Merck bought Schering-Plough in 2009, the two companies merged their BACE efforts, embarking on a multifaceted plan that resulted in MK-8931 and several back-up compounds. It was no small feat, Kim said during the R&D briefing. “If you look at what our chemists had to do, it’s an unbelievably impressive story,” he said.

During a recent phone interview with Xconomy, one of the scientists who managed Merck’s BACE program provided a taste of the hurdles the team faced, and the technology they used to come up with new approaches to targeting BACE. Eric Parker, senior director and neuroscience site lead for Merck, says the basic challenge lies in the very structure of BACE. The enzyme is so complex, he says, “you need a large molecule to make many different points of contact with it.” With any drug, he adds, “it’s difficult to make it stick—to make it bind with high affinity for the enzyme.”

One problem with large molecules, Parker says, is that it’s difficult to make them into pills that can travel through the stomach without getting destroyed. What’s more, large molecules can’t easily cross the blood-brain barrier or … Next Page »

Comments | Reprints | Share:          

Biotech rivalries are sometimes a bit like boxing matches, where you have two lone fighters vying for the prize. But the hepatitis C market is turning into a battle royal that’s more wide open and unpredictable, with all the competitive maneuvering, surprise crashes, and comebacks you might expect from the Daytona 500.

The medical advances in hepatitis C have been dizzying this year, especially in what it means in terms of multi-billion dollar business implications. The safest thing to say is that there’s plenty of good news for patients this year, but that shareholders in the major hepatitis C drug developers had better hold on tight as a new standard of care gets established.

Some commentators figured that Gilead Sciences (NASDAQ: GILD), the world’s biggest maker of HIV drugs, had essentially locked up the dominant position in this new drug class through its $11 billion acquisition last month of Princeton, NJ-based Pharmasset (NASDAQ: VRUS). But it’s still too soon for anyone to declare victory over the wily and fast-mutating virus that causes hepatitis C. Given the way drug development is going now, it’s possible we could have dueling antiviral drug cocktails that cure almost 100 percent of patients within five years. And before we get there, we’re going to see some fascinating chess moves—and probably a few surprising collaborations—from companies like Vertex Pharmaceuticals, Merck, Roche, Johnson & Johnson, Bristol-Myers Squibb, and Abbott Laboratories, as well as several smaller biotech startups like Alpharetta, GA-based Inhibitex (NASDAQ: INHX).

The Pharmasset compound that prompted Gilead to write such a big check, PSI-7977, is “certainly not a panacea, not the lone answer,” says Kleanthis Xanthopoulos, the CEO of San Diego-based Regulus Therapeutics, and the co-founder of another hepatitis C drug developer, Anadys Pharmaceuticals.

Regulus Therapeutics CEO Kleanthis Xanthopoulos

Xanthopoulos says Gilead was “taken to the cleaners,” and that the hepatitis C market is still up for grabs. “It’s going to take some time before people figure out how it plays out,” he says. The Pharmasset drug “is a powerful player, but you will need other direct-acting antivirals. You want to go to a 100 percent cure rate. I can guarantee the Pharmasset compound isn’t going to do it alone.”

Hepatitis C has never really captured big headlines in the U.S., as it has never benefitted from massive awareness boosting campaigns that have supported research for, say, HIV, or breast cancer. But hepatitis C has clearly emerged as one of the biggest opportunities in pharmaceuticals over the past few years. There are more than 3 million people in the U.S., and an estimated 170 million worldwide, with this liver infection that can lead to cirrhosis and liver cancer. Most people have never bothered to get treated, partly because the infection takes years to fully wreak havoc. The other reason is the standard of care with a combination of drugs—pegylated interferon alpha and ribavirin—causes flu-like symptoms that last for almost a year, and usually cures only 30-40 percent of patients. Essentially, most people figure the treatment is worse than the disease.

Vertex Pharmaceuticals changed the equation back in May. The company won FDA approval for a direct antiviral drug, a protease inhibitor called telaprevir (Incivek), that is added to the usual two-drug combo regimen. By adding the Vertex drug, researchers saw the cure rate boom to almost 80 percent of patients, while cutting the treatment time with the other drugs in half. The Vertex drug also significantly raised … Next Page »

Comments (2) | Reprints | Share:          

The acronym RSV is one that often inspires dread in the hearts of parents—it stands for Respiratory Syncytial Virus, and it hospitalizes 75,000 to 125,000 children under the age of one each year, infecting almost all children by the age of two. RSV can also have a life-threatening impact on the elderly.

There is a successful treatment against RSV made by AstraZeneca’s MedImmune unit, but there is no marketed vaccine to protect against RSV infections in the first place. That may soon change as Ann Arbor, MI-based NanoBio announced yesterday that it will partner with pharmaceutical giant Merck in a preclinical collaboration in the development of an RSV vaccine that’s delivered as a nasal spray. About a year ago, the vaccine program secured a $6 million grant from the Bill & Melinda Gates Foundation.

“This is a very exciting project for the company,” says James R. Baker, Jr., NanoBio‘s Founder and CEO. “We feel this could be a really useful therapy toward prevention.”

NanoBio’s technology appears effective at preventing infection, Baker says, while also remaining free of the disease-eliciting side effects that have derailed other attempts at an RSV vaccination.

The studies will evaluate the combination of Merck’s proprietary RSV antigen with NanoBio’s NanoStat adjuvant, which makes the vaccine more potent. As part of the agreement, Merck has the option to negotiate a non-exclusive license to NanoBio’s technology for use in the development of a commercial RSV vaccine.

Founded in 2000 as a spin-out from the University of Michigan’s Center for Biologic Nanotechnology, NanoBio is a biopharmaceutical company focused on developing and commercializing novel products for the prevention and treatment of infectious diseases based on its patented NanoStat platform. Baker estimates that the collaboration with Merck will last 18 months to three years.

Comments | Reprints | Share:          

Dendreon has never lifted a finger to develop any new drugs for hepatitis C, but now the Seattle cancer drug developer is getting $125 million in cash for its stake in the emerging market for the chronic liver infection.

The company (NASDAQ: DNDN) said today it made the money by selling off the rights to its royalty stream related to boceprevir (Victrelis), a new hepatitis C drug. Dendreon sold the royalty rights to CPP Investment Board.

While Dendreon has always invested its time and money in developing cancer drugs, it obtained the hepatitis C intellectual property through its 2003 acquisition of San Diego-based Corvas International. Corvas had licensed its IP to Schering-Plough, which used it in part to develop boceprevir, a protease inhibitor for hepatitis C. Schering-Plough is now owned by Merck, and Merck started generating revenue from the intellectual property in May when it won FDA approval of the new drug. Dendreon didn’t disclose what percentage it gets from worldwide sales of Victrelis, but the company said it collected $2.9 million in royalties from Merck in the three-month period that ended Sep. 30, according to its most recent quarterly report.

“The sale of the Victrelis royalty interest allows the company to strengthen our cash position, and enables us to further invest in our core business initiatives,” said Greg Schiffman, Dendreon’s chief financial officer, in a statement.

Dendreon certainly has found itself in a position where it needs to scrape together cash any way it can. The company is on track to fall way short of the $350 million to $400 million sales forecast it had this year for its lone marketed product, sipuleucel-T (Provenge) for prostate cancer. The sales shortfall prompted Dendreon to lose more than 60 percent of its market valuation, and prompted Dendreon to cut 500 jobs back in September. Despite the cost cuts, the company still burned through $106 million of cash in the most recent quarter. It had $568 million in cash and investments left in the bank at the end of September.

Comments | Reprints | Share:          

[Updated 12/6/11 10:35 am. See below.] Today Biogen Idec (NASDAQ: BIIB) and Seoul, Korea-based conglomerate Samsung announced that they are teaming up to develop and market biosimilars—low-cost versions of biotech drugs that are losing their patent protection. The two companies will form a joint venture, based in Korea, which will be funded by $255 million from Samsung and $45 million from Biogen. Biogen, based in Weston, MA, will take a 15 percent stake in the venture.

[Material added to provide further details on Eidetica.] Biogen has long hinted at its interest in biosimilars. In 2009, Xconomy reported that the company had quietly set up a Swiss subsidiary called Eidetica to develop and manufacture biosimilars. A spokeswoman for Biogen told Xconomy today that the company started Eidetica to explore biosimilars but discontinued the initiative. “We are not currently pursuing any biosimilars strategy on our own outside of this [Samsung] joint venture,” she says.

Biogen hasn’t said much else about its biosimilars strategy, but in January of this year, CEO George Scangos told Bloomberg that he expected them to constitute “a meaningful revenue stream” and that the company was working on several biosimilar molecules. Biogen said today that the Samsung joint venture would not pursue biosimilar versions of proprietary Biogen drugs.

Biogen is the latest in a string of companies to aggressively pursue biosimilars. In October, Michael Kamarck of Merck (NYSE: MRK) told Xconomy that his company had embarked on a multifaceted plan to develop biosimilar versions of several blockbuster drugs, including Amgen’s filgrastim (Neupogen) and pegfilgrastim (Neulasta). Kamarck reiterated Merck’s commitment to biosimilars at the company’s R&D briefing for analysts in November.

Samsung may seem an unlikely partner for Biogen in this latest endeavor. But in fact, in May 2010, Samsung declared biotech to be one of five new strategic businesses that would drive its growth going forward, and it committed to invest $2 billion into the sector by 2020.

Biogen Idec did not immediately respond to a request for comment on today’s announcement. The price of Biogen’s stock, at $11.79 per share, was unchanged in pre-market trading.

Comments | Reprints | Share:          

Pharmaceutical giant Eli Lilly is increasing its bet on a small team of TB drug hunters in Seattle.

Indianapolis-based Lilly (NYSE: LLY) said today it has agreed to provide $4.2 million over the next four and a half years to the Seattle-based Infectious Disease Research Institute to continue its efforts to discover drugs for tuberculosis.

The research support is the latest step in Lilly’s efforts to support TB drug development, which started in 2007. That was when Lilly acquired Bothell, WA-based Icos for its hit erectile dysfunction drug, and found that it didn’t really want the scientists or cutting-edge drug discovery equipment that was at the core of the biotech company. So a team of former Icos scientists—Ed Kesicki, Allen Casey and Joshua Odingo—migrated to IDRI to pursue their interest in TB in collaboration with Tanya Parrish. Lilly donated $9 million worth of Icos’s drug screening equipment, joined Merck in donating hundreds of thousands of potential TB drug candidates from proprietary chemical libraries, and agreed to fork over $6 million in cash over five years to support the Lilly TB Drug Discovery Initiative.

Tuberculosis, an airborne infectious lung disease, has never been much of a priority of the pharmaceutical industry since it was largely eradicated from wealthy countries like the U.S. decades ago. But the World Health Organization estimates that 1.7 million died from TB in 2009, with most of the cases in Southeast Asia and Africa. Currently used TB drugs were developed more than 40 years ago, Lilly says, and about half a million people a year now develop cases that resist drugs that used to be effective.

The Lilly TB Drug Discovery Initiative, which includes philanthropies and government agencies as well as IDRI, doesn’t appear to have yet delivered a new TB drug candidate into clinical trials. Today’s statement didn’t say what the goals are for the next phase of the program.

As it so happens, Lilly CEO John Lechleiter will be in Bellevue, WA tomorrow to give a keynote talk at the Washington Biotechnology & Biomedical Association’s annual meeting. I plan to interview Lechleiter while he’s in town, and will ask about the local TB efforts. If you have other questions you’d like to pose to him, just send me a note at ltimmerman@xconomy.com.

Comments | Reprints | Share:          

New England area biotechs had news this week on stock price, clinical data, new financings, and more.

—AMAG Pharmaceuticals of Lexington, MA, saw its stock shoot up 18 percent to $16.21 on Monday after announcing its CEO Brian Pereira’s departure and its plans for reducing operating expenses. AMAG (NASDAQ: AMAG) has struggled in transitioning from a diagnostic-imaging product maker to a drug developer, with its shareholders recently voting down a plan to merge with Allos Therapeutics (NASDAQ: ALTH).

—An early analysis of a pivotal study of Cambridge, MA-based Ariad Pharmaceutical’s experimental drug ponatinib showed the treatment may be safer than it was originally thought to be. A previous trial of the drug showed that about 12 percent of patients developed an adverse event known as pancreatitis, but Ariad (NASDAQ: ARIA) lowered the dose for the second trial and the rate of pancreatitis decreased to 3.7 percent of patients.

—Lebabon, NH-based PharmaSecure inked a $3.9 million investment late last month to put towards its technology for more cheaply preventing the sale of counterfeit drugs in markets like India. The money came from Innovation Endeavors—the fund led by former Google CEO Eric Schmidt—as well as Gray Ghost Ventures, Healthtech Capital, and TEEC Angel Fund.

—Cambridge-based Vertex Pharmaceuticals (NASDAQ: VRTX) saw its stock drop 17 percent over two days after other biotechs developing rival hepatitis C drugs shared promising data at the American Association for the Study of Liver Disease (AASLD) annual meeting in San Francisco this week.

—Rhythm Pharmaceuticals, a Boston startup developing experimental obesity and diabetes treatments, hired Keith Gottesdiener, a veteran of the pharmaceutical giant Merck, as its new CEO.

—Dusa Pharmaceuticals plans to begin Phase 2 clinical testing later this month of its drug-device combination for preventing the recurrence of pre-cancerous skin growths known as actinic keratoses (AK). The company has sold the treatment, Levulan Kerastick, as a method for removing existing growths, but dermatologists have reported success preventing their recurrence by applying the product for longer than initially directed. Wilmington, Ma-based Dusa (NASDAQ: DUSA) is seeking FDA approval to market the product for that purpose.

Comments | Reprints | Share:          

Merck (NYSE: MRK) outlined progress on several of the drugs in its pipeline today during its annual R&D and business briefing for Wall Street analysts and investors, which was held at the drug giant’s Whitehouse Station, NJ headquarters.

CEO Kenneth Frazier began the day by acknowledging that Wall Street has been impatient with the company’s progress in advancing novel drugs to market. Despite the fact that the company has won FDA approval for five new products this year—including boceprevir (Victrelis) to treat hepatits C—the company’s stock has been declining over the last six months, dropping from $36 in May to $33.80 yesterday. “We recognize we can’t ask you—our investors—to wait for us to achieve our long-term aspirations,” Frazier told the audience at R&D Day.  ”I want you to know we intend to perform in the short term.”

Merck’s R&D chief Peter Kim started by highlighting several drug candidates in Merck’s late-stage pipeline. Kim reviewed recent data on a range of drugs to treat such conditions as osteoporosis, atherosclerosis, and chronic insomnia. Kim vowed to submit eight new drugs to the FDA for approval in 2012 and 2013.

During R&D day, Merck outlined recent progress on six novel drug candidates, including two the company detailed for the first time. First is MK-3102, an oral drug to treat … Next Page »

Comments (1) | Reprints | Share:          

Merck veteran Keith Gottesdiener will become the new CEO of Boston-based Rhythm Pharmaceuticals, a Boston startup developing experimental drugs for the treatment of metabolic conditions such as obesity and diabetes, according to an announcement today.

Gottesdiener oversaw pivotal clinical trials as Merck’s former vice president and late-sage therapeutic group leader, and is joining Rhythm as it pushes two drug programs through clinical development. The biotech is navigating the crowded therapeutic field with two drug compounds it has licensed from the French biotech company Ipsen.

Rhythm’s compound RM-131 could enter a Phase 2 clinical trial early next year as a treatment for a complication of Type 1 and Type 2 diabetes called gastroparesis—a digestive disorder involving the abnormal emptying of the stomach. Rhythm is also aiming to file an FDA application by the end of this year to begin human testing of its compound for curbing food intake in severely obese populations who suffer from diabetes or are at risk of developing the disease.

Rhythm is backed by MPM Capital, New Enterprise Associates and Third Rock Ventures.

Comments | Reprints | Share: