FDA's Jenkins Sounds Off on Incomplete NDAs

Earlier this week, FDA issued a Refuse to File on Merck-Serono's cladribine application, meaning the agency felt the NDA was sufficiently lacking that it didn't want to begin a review yet.

The topic of Refuse to File letters came up today at Windhover's FDA/CMS Summit. No drug or company was mentioned by name, however; the discussion was prompted by an audience question and warmly embraced by FDA Office of New Drugs director John Jenkins.

FDA, Jenkins said, has for the most part held up its end of the bargain created 17 years ago by the industry-FDA agreement known as PDUFA. "Most of the time," he said, FDA reviews drugs in the appropriate time window. But too often industry is developing the drug on FDA's review clock. If industry really expects FDA to stick to that model, he said, applications need to be complete so that questions won't arise just before the PDUFA date because information is still coming in from drug sponsors during the review process.

If industry's complete response letters were released, "would you make sure your application is complete before you submitted it?" asked Jenkins. Would senior executives wake up to regulatory realities? Jenkins suggested that companies "do the math some time." Delaying an NDA a few months until it's truly complete can save double that time on the extended review process that results from incomplete applications.

We can't be sure why FDA dinged Merck-Serono's application; that information is, for now, secret. In a recent feature about potential orally available multiple sclerosis therapies we duly noted that Merck Serono's chances with its first-to-NDA oral therapy cladribine weren't a 'slam dunk'. The drug's efficacy looks great in one Phase III trial in relapsing remitting MS patients, and side effects in this therapeutic space are navigable, for sure (just ask Elan and Biogen Idec). But that's just one trial, as we also noted, and the drug hasn't been tested against an active comparator. It was never clear how FDA would react to that.

FDA's rebuttal might have been due to some other deficiency unrelated to the lack of a confirmatory Phase III trial (which will take the company many more than just a few months, given the time frames for large MS trials). For its part the company has stated that it will get together with FDA as soon as possible to discuss the issue and other Phase III studies of oral cladribine which are ongoing in different forms of MS.

image from flickr user wilhei55 used under a creative commons license

DotW: It's A Mad Mad Mad Mad World

These days it seems like we could all use a dose of Stanley Kramer's 1963 classic movie about a madcap chase through the California desert in search of treasure. (What else is there?) Thankfully we have the NCAA tourney--that professional event masquerading as amateur ball--to distract us from the doom, gloom, and outrage swirling in the air.

Who's not feeling the love? Mad Money's Cramer, who is still reeling from the smackdown Jon Stewart gave him last week. Anyone associated with AIG, which has earned a new acronym in the eyes of many Americans: Arrogance, Ignorance, and Greed. Also, Connecticut Senator Christopher Dodd, given the responsibility he bears for the bail-out legislation that led to outsized AIG bonuses in the first place.

Our level-headed legislators are trying to tamp down the furor related to AIG bonuses by taxing the hell out of them. (The move ought to make VCs feel better; by comparsion the new 39% tax rate on carried interest is quite modest.)

There's no shortage of madness in our own industry. The war of words between BVF and Avigen, continues to escalate. (Remember when Carl Icahn was the only activist shareholder to whom we paid attention?) On Friday, BVF sent a letter to Avigen shareholders promising to pay $1.20-a-share for the company, but only if BVF earns seats on the company's board. BVF, of course, owns a significant share in Avigen. Outraged by the way the biotech has been managed, they are hoping to oust leadership to broker a sale to MediciNova.

Of course, the BVF/Avigen saga is small potatoes compared to the umbrage directed at Harvard professor Dr. Joseph Biederman, whose involvement in a conflict-of-interest scandal related to the use of antipsychotics became headline news once again. So much for the purity of the ivory tower.

Will Pfizer investors rise up in anger at the news the big drugmaker is on the prowl for a generics biz? What about Astellas' investors? Unwilling to be drawn into a bidding war for CV Therapeutics after Gilead trumped its offer, Astellas called off its hostile bid for the company this week. But with billions in cash in its war chest and top-seller FloMax due to go off patent in October, the number 2 Japanese pharma needs to do a deal and odds are investor clamoring to that effect will rise in the coming months.

Are you outraged about the incessant debate about Michelle Obama's right to bare arms? Stop the madness. It's time for...

Merck Serono/Fast Forward: Merck Serono this week showed its willingness to accelerate early stage research in MS by providing up to $19 million in a partnership with Fast Forward, a subsidiary of the National Multiple Sclerosis Society. The agreement—which has a two-year term, but may extend for an additional three—is focused on identifying the most promising drug discovery research in this field, whether in biotech or academia, and providing the funds to take those projects through development. The money might all be coming from Merck Serono, but it’s Fast Forward—set up 18 months ago to provide a bridge, both informational and financial, between academia and the private sector—that will take the lead in selecting awardees for the funds (albeit with participation from the drug firm). Priority areas for development, however, will be determined by a joint committee with representatives from both sides. And yes, there are strings attached: Merck Serono, with (of course) a strong interest in building out its MS franchise beyond Rebif, gets first right of refusal to pursue development of projects that it supports. Fast Forward is keen to point out that these rights don’t extend to the many other projects it’s funding independently of this agreement, however. And if Merck Serono isn’t interested in pursuing a program, Fast Forward is free to find another partner. For Merck Serono, this smells a bit like disease-focused corporate VC—albeit with a significant partner making portfolio decisions. And although many other disease-focused charities besides the National MS Society are supporting and financing research in academia and, increasingly, in the private sector too, few have signed up large drug firms. Not that this means other pharma aren’t interested in supporting early-stage research, of course: GlaxoSmithKline has a drug performance unit (DPU) dedicated to academic collaborations.—Melanie Senior

Merck/MMV: Merck Serono wasn’t the only pharma to announce a tie-up with a not-for-profit this week. Merck & Co. Inc. also made headlines, announcing a deal with the Medicines for Malaria Venture (MMV) around a novel, orally available, IND-ready antimalarial. Under the terms of the agreement Merck, whose researchers discovered the candidate, has granted MMV an exclusive royalty-free license to pursue development of the malaria drug in countries where the disease is endemic. In return, Merck retains the option to become MMV’s development partner upon completion of the first Phase II study of the candidate. But if it exercises that option, Merck has also promised that it will price the drug such that it is “not ultimately profiting from its use in developing countries,” according to the press release announcing the news. Merck scientists have already shown in preclinical studies that the IND-ready drug is effective against P. falciparum, the organism that causes acute malaria, including multi-drug resistant strains. MMV will take-over further testing, launching first in human safety trials later this year. The deal is a good one for Merck on a number of levels. It bolsters the pharma’s public image, showing its intent to play a role in developing treatments for diseases that have long been neglected, a move echoed by GlaxoSmithKline and Novartis. It also offloads some development costs near-term, while retaining a clawback to the product should it ultimately work as advertised. More importantly, from the biz dev perspective, it may give Merck access to a priority review voucher in the future. The PRV program, first proposed by a group of Duke economics professors as a potential approach to incentivize R&D for global public health priorities, was included in the FDA Amendments Act with only minor refinement in 2007. Merck, like Pfizer and Sanofi-Aventis, has signaled its interest in the program, by offering comments on FDA’s draft guidance for the incentive program.—Ellen Foster Licking

Centocor/U. Michigan: Even as debate rages in the public sector about the academia’s ties to industry, Big Pharmas’ efforts to get closer to thought leaders at universities is likely to muddy the discussion. In addition to GlaxoSmithKline and AstraZeneca, Johnson & Johnson has been at the forefront of embracing a new model of innovation that improves information flow between the tree-lined walks of academic institutions and the halls of pharma. In January, J&J’s Belgium affiliate Janssen Pharmaceutica NV teamed up with Vanderbilt University's Program in Drug Discovery to discover and license metabotropic glutamate receptors for the potential development of a new class of schizophrenia drugs. That collaboration, which promises to move J&J’s schizophrenia therapy in a new direction, fits in with the pharmaceutical company's new mantra of "open innovation," a term Paul Stoffels, MD, J&J's chairman of global R&D, Pharmaceuticals, first used in media interviews at the beginning of the year. On March 19, J&J announced another deal, this time between Centocor and the University of Michigan, designed to further its ability to access innovation on the cheap. In an interesting twist, the Centocor/U. Michigan tie-up doesn’t relate to the product pipeline as much as the war for talent. The new program pairs minority post-doctoral fellows recruited by the University of Michigan with Centocor researchers to work jointly on interesting research. Under the program, research proposals will be developed by U Mich and Centocor scientists and then submitted for review by a combined steering committee that will select certain grants and follow their progress. One important mission of the program will be fostering strong relationships with African Americans, Hispanic, and Native American scientists who are working in the strategic areas of focus for Centocor. “This strategic link will help us build strong relationships with these talented individuals thus creating a robust pipeline of potential hires,” said Miguel Barbosa, PhD, VP of Discovery Research at Centocor. It’s the latest attempt to do well financially by doing good, but it’s unquestionably a smart PR move on Centocor’s part. It requires very little financial input, breathes new life into the organization, and may yield interesting products down the road.—Ellen Foster Licking

Inverness/Acon Labs: Point-of-care diagnostics specialist Inverness has scooped up the remaining portion of ACON Labs’ lateral flow immunoassay test kit business for the consumer, point-of-care, and laboratory markets, including tests in infectious disease, cardiology, drugs of abuse, and women’s health. The price of the deal? A mere $200 million. ACON will retain its other worldwide in vitro diagnostics businesses including diabetes testing, clinical chemistry and other immunoassay products. Inverness expects to complete the transaction in a series of cash payments through October 2011, but holds the option to use stock for up to 34% of the purchase price. Three years ago, following a patent dispute in which Inverness alleged ACON infringed several of its immunoassay patents including IP around consumer pregnancy and ovulation tests, it acquired ACON’s rapid diagnostics businesses covering the US, Canada, most of Europe, and parts of the Pacific Rim for $175 million. At the time, Inverness agreed to buy the remainder of ACON’s ROW territories including China, India, Russia, Latin and South America, the Middle East, Africa, and Eastern Europe. That “second territory” business – the subject of this deal -- accounted for $45 million in revenues last year. The deal returns Inverness to its “bread and butter: broadening geographic reach and leveraging sales and manufacturing infrastructure,” according to Leerink Swann analyst Bruce Cranna. Inverness has been on a more expansionist buying spree in the past several years, acquiring Biosite and Cholestech in 2007 (see our coverage in IN VIVO here),then shelling out over a billion dollars to buy Matria Healthcare and establish a health management division alongside its diagnostics business.--Mark Ratner

GTC-Biotherapeutics/LEO Pharma: Our, uh, “goat” this week is a deal that has for months apparently been in slow transition, but last Friday took a nasty turn (OK, yes, so it’s a No Deal of Last Week). LEO Pharma has since 2005 held rights to develop and market GTC-Biotherapeutics’ recombinant human antithrombin Atryn in Europe, Canada and the Middle East, but it just doesn’t want those rights anymore. So last year the two companies said that LEO wanted to transition Atryn to a different marketing partner, and GTC has been seeking to do so (Atryn, which is made in the milk of transgenic goats, was approved in Europe in 2006, and was also recently approved in the US as well, where it will be sold by Ovation). Now comes word that “GTC considers LEO to be in breach of its obligations under the contract and is terminating the contract pursuant to its terms and seeking damages under International Chamber of Commerce arbitration procedures.” Terminating the LEO deal should allow GTC to speed discussions with new potential partners, broaden the drug’s label in existing markets and get it approved in other markets, like Canada. One potential partner: LFB Biotechnologies, the French plasma-drugs specialist that loaned GTC $15 million last December and with whom GTC has an existing deal in recombinant proteins and mAbs development. Meanwhile GTC, despite its recent regulatory success in the US—which the company believes is a significant validation of its transgenic technology—has other troubles. This week the biotech received a warning letter from Nasdaq related to the minimum market-value threshold.—Chris Morrison

Image courtesy of flickr user oceanaris through a creative commons license.

DotW: State of the Union

Okay, we at IVB know that Tuesday night's speech wasn't really a state of the union address. Call Obama's discourse a precursor, a practice run, a preliminary to the real thing coming in 11 months. Whatever you call it, there's no denying the officially unofficial address will likely go down in history as one of the most important events--after the budget, also released this week--of 44's first 100 days. Not necessarily because, as Ezra Klein at American Prospect notes, it was a particularly inspiring--or terrorizing--speech. But because "he didn’t wrap his agenda in a lot of rhetoric about America’s mettle or hide it behind stories and icons. He just sort of said it." Imagine.

In a week where the Dow plummeted to lows not seen since 1997 and news on rising unemployment and falling home sales only added to the gloom, it's perhaps natural to take stock of the biopharma state of the union. Sadly, as investors worried over the mind-boggling $3.6 trillion federal budget Obama submitted Thursday, the stock prices of pharma companies, med-tech outfits and insurers dropped, illustrating again that there is no such thing as a recession proof industry.

As the saying goes, you can't swing a dead cat without hitting a troubled biotech these days. Elan once again made the news with an announcement that it was shedding 230 jobs--half in Ireland and half in California--as it tries to control costs and marshall resources. (No word on the corporate jets.) Meantime, Vanda is the latest company to experience the full brunt of shareholder activism, while Intercytex shows regenerative medicine is still a tough area to grow a business.

And then there's Dynogen, this week's winner of IVB's little engine that couldn't prize. The company declared chapter 7 less than a year after trying to go public via the SPAC--or is it SCRAP?--route. Even as six law firms kvetched about their unpaid legal fees, Dynogen's venture backers, which include Oxford Bioscience Partners, SV Life Sciences, and Abingworth Management, took it on the chin despite sinking $67 million into the IBS developer.

In what is surely a sign of the times, this week Pfizer announced it was discontinuing work on two Phase III primary care products, PD 332,334 for generalized anxiety and esreboxetine for fibromyalgia, to redirect resources to drug candidates with more potential. The news shows that even Big Pharma face tough decisions these days about which programs to move forward and which to table. Could the news mark the beginning of the much vaunted Pfizer transformation CEO Kindler has talked about in the days since moving to acquire Wyeth? This blogger is reserving judgement until the New York pharma actually does some thing revolutionary, such as not just killing the programs but outlicensing them. (For another opinion on Pfizer's transormation potential be sure to check out this hilarous youtube video by a former Ann Arbor, MI-based employee.)

Meantime when it comes to dealmaking in the biopharma state, the big news this week was partnerships gone awry. Astellas made the decidely un-Japanese decision to go hostile in its quest for CV Therapeutics, despite the fact that the decision means Astellas violates a longstanding standstill agreement tied to the California biotech's Lexiscan imaging agent. The Roche/Genentech saga continues apace, with Roche marshalling its economic might by issuiing over $30 billion in bonds in the past two weeks, and Genentech preparing to woo investors at its annual R&D day in NYC on Monday. (Better be some good danish at that meeting...)





Synta’s shocking news that it was halting a Phase III trial of metastatic melanoma drug elesclomol due to excess mortality likely portends an end to its rich partnership with GlaxoSmithKline. Originally inked in 2007, the agreement has added just over $100 million to Synta’s coffers. And, as we wrote on Monday, Johnson & Johnson and Basilea seem poised to begin a very public fight over milestone payments tied to regulatory approval of the antibiotic ceftobiprole. Frustrated over European and US regulatory delays associated with the drug, Basilea announced it was seeking arbitration to obtain compensation from partner J&J for outstanding milestones and the value of the opportunity lost in not having ceftobiprole on the market.

Here at IVB, we know that not all deals are created equal. We, the bloggers, in order to form a more perfect industry, provide for the common defense and promote the general welfare, bring you another edition of Deals of the Week. (Domestic tranquility is not, however, guaranteed.)

Merck Serono/Ambrx: Merck Serono and Ambrx formed a more perfect union this week as they expanded their existing relationship to include the development and commercialization of a preclinical biological multiple sclerosis candidate, ARX424. According to the deal, announced Feb. 24, Darmstadt, Germany-based Merck Serono gains exclusive global development and commercial rights for the MS compound. In exchange, Merck Serono will pay an undisclosed sum to Ambrx, plus pick up an equity stake. Ambrx also stands to receive undisclosed clinical, regulatory and commercial milestone payments for drugs that make it to market, plus royalties on global sales, as part of the package. Furthermore, it has the option down the line of converting royalty rights in the US to a profit-and-loss sharing agreement. San Diego-based Ambrx is one of those increasingly rare beasts: a biotech with plenty of cash resources that's announcing staff increases rather than layoffs. In the last 20 months, Ambrx raked in $60 million thanks to the recent equity deal and milestone payments from its alliance partners, which also include Merck and Eli Lilly. Thanks to these resources, CEO Steve Kaldor says, conservatively speaking, his firm should be able to get through late 2011 or early 2012 with no need for new financing or equity deals. "We continue to sustain a multi-year runway while growing our biologics product portfolio and innovative platform" he said. Of course, it helps that Ambrx's RECODE (reconstituted chemically orthogonal directed engineering) technology allows the company to endow native proteins with new therapeutic propertis. And readers you know what that means. Even if the company is devoting much of its efforts to creating first-in-class molecules, there is the potential to use RECODE to create follow-on biologics, be they true generics or copy cat molecules with a twist. It's an area of intense interest to Big Pharma these days, especially given the Obama Administration's willingness to include FOB legislation in the most recent Congressional budget. (Teva and Merck dominate the Big Pharma FOB horse race currently thanks to their deal making in recent months, a topic highlighted in the February issue of IN VIVO.) As for the MS compound that was central to the Merck Serono/Ambrx deal, there are few details on the exact nature of the protein in question. "It may be a pioneering target or a follow-on biologic. We are not divulging what class it is," Kaldor told our sister publication "The Pink Sheet" DAILY. Whatever class it is, it's IVB's bet that Ambrx will not long remain an independent company. Merck Serono is our pick to buy it.

CSL/Xencor: Any doubts about interest in next generation technology that provides souped-up antibodies, look no further than news that Aussie biopharma company CSL signed an R&D alliance with Xencor to gain access to the privately-held biotech's Xmab technology, which allows the optimization of antibodies to create molecules with increased potency and longer half-lives. Details of the agreement--from its apparent breadth to the size of the upfront payment and downstream milestones--were lacking. It's the second such alliance Xencor has signed this month. Earlier in February, the biotech announced it was teaming up with Human Genome Sciences to use Xmab to create better versions of the Rockville, Maryland-based company's antibodies. Details of that transaction weren't disclosed, either. For the privately-held Xencor the two transactions--even if modest in size--likely provide much needed non-dilutive funding. The company, which has raised $130 million since its 1997 founding, last raised money in Oct. 2007 when it tacked an additional $15 million onto a 2006 $45 million Series E, which was led by MedImmune Ventures with additional backing by Novo Nordisk and HealthCare Ventures. (New investors in the Series E extension included Oxford Bioscience Partners and Merlin Nexus.) It's hard to tell how long Xencor's backers are willing to subsidize the company, but despite numerous partnerships--including deals with Centocor, Genentech, and Boehringer Ingelheim, no suitors have been sufficiently impressed with the technology to want to acquire the Monrovia, CA-based company despite pharma's 2007 land-grab for next generation antibody technologies. It could be that companies are still waiting for validation that the technology works as advertised: molecules in Xencor's internal pipeline are still at a very early stage. The biotech's lead product, an anti-CD30 for Hodgkin lymphoma and other T-cell lymphomas, is only in Phase I development.

Actelion/GeneraMedix: In a continuing bid to strengthen its position in the pulmonary arterial hypertension market, Switzerland's Actelion announced Monday that it would pay an undisclosed amount for worldwide development and commercialization rights to an IV formulation of epoprostenol from the injectable generics group GeneraMedix. Approved by FDA in June last year, this improved formulation of GlaxoSmithKline's (now generic) Flolan offers more convenient storage options than epoprostenol alternatives, including another generic from Teva approved last year. While not likely to be a large deal, the tie-up makes sense. It allows Actelion to leverage its existing infrastructure and expertise in this specialist field, where it already sells the lead drug Tracleer (bosentan). But there is no way epoprostenol will come anywhere close to replacing Tracleer, which sold CHF 1,294 million in 2008, and is under increasing pressure from contenders marketed by Gilead and United Therapeutics. (A generic version will also be available come 2015 for those keeping track.) According to analysts at Piper Jaffray, who estimate total worldwide sales of IV PAH therapies are worth about $200 million to $300 million, epoprostenol may add $30 million to $50 million in sales before 2014. To make up the revenue gap from potential lost Tracleer sales, look for Actelion, which has a sizeable war chest--approximately CHF 1.1 billion in cash at the end of 2008--to sign additional deals in the coming months.

Cephalon/Arana: Arana's mystery buyer has a name: Cephalon. On Feb. 26, Aussie biotech Arana announced that it was involved in take-over discussions. Trading on the Australian Stock Exchange was halted in anticipation of a buy-out. One day later Cephalon revealed that it intends to offer A$1.40-a-share for the biotech, a 69% premium to Arana's closing stock price on Feb. 25. If the offer goes through at the current price--and it does have the support of Arana's independent directors absent a superior proposal from another party--it will be worth approximately A$318 million ($207 million USD). In support of its bid, Cephalon took steps to secure nearly 20% of Arana's issued shares from the Aussie outfit's two largest shareholders, Start-Up Australia Ventures and Rockwell Securities Ltd., before launching the formal offer. The deal represents a slight shift in Cephalon's deal-making strategy in recent months in that it is not tied to any contingent value rights. Recall that Cephalon's recent $100 million tie-up with Ception was an option-based deal that gave the Frazer, PA-based company the right to buy the smaller biotech for an additional $250 million plus milestones and earn-outs if a Phase IIb/III trial of Ception's antibody reslizumab for eosinophilic asthma panned out. But the recent deal is certainly in-line with Cephalon's stated desire to build a larger presence in both biologics and inflammatory disease. Together with the ImmuPharma compounds Cephalon recently locked up and Ception's reslizumab, Arana's portfolio of tumor necrosis factor (TNF) alpha blockers, gives Cephalon a tidy pipeline of drugs aimed at diseases such as lupus, rheumatoid arthritis, and psoriasis. Indeed, Arana's Phase II novel anti-TNF domain antibody for psoriasis, ART621, was the primary driver of the deal. Of course, it helps that in addition to a novel pipeline of products, Arana also comes with a guaranteed revenue stream: thanks to strong IP in the anti-TNF space, the biotech receives royalties from Abbott Laboratories and Johnson & Johnson on Humira and Remicade.

Medtronic/CoreValve: As we wrote earlier this week, you know Medtronic's $1.03 billion buying spree is only the beginning, not the end, of the long-anticipated land grab around the percutaneous valve replacement field and its two major sub-markets--aortic and mitral valve devices. There has been a lag of several years since Edwards Lifesciences did the first major deal in the space, acquiring aortic player Percutaneous Valve Technology (PVT) in late 2003. But the promise of the market has continued to grow as investment remained active, technology improved, and the competition increaed. Give Medtronic credit for the executing the old "shock and awe" routine with perfection, by picking up a pair of percutaneous players in quick succession: CoreValve Inc. and Ventor Technologies Ltd. For Medtronic, these deals represent not just an investment in technology building. In CoreValve, the device behemoth gets a company that is already competing aggressively in the European aortic market, where CoreValve's smaller-sized system is running neck-and-neck with long-time leader Edwards. The deal could spark a torrent of additional partnering, especially as Edwards Lifesciences and St. Jude looked to build armamentariums competitive with Medtronic's.

Interested in future deals-of-the-week candidates? Check out the the January issue of Medtech Insight for the full story on percutaneous aortic valve players, and the technical and operational challenges facing the field.

(Photo courtesy of flickr user tsevis through a creative commons license.)