Budget Progress Grinds Ahead

With exactly a month to go before the budget deadline the possibility of having a spending plan in place by June 30th is looking less likely all the time. Both parties in Harrisburg appear firmly entrenched and that has many wondering what happened to talk about an early agreement.
Governor Ed Rendell and lawmakers from both parties spent much of winter and spring voicing hopes the budget could be passed early this year. Now Republicans are insisting Rendell’s plan has too many tax increases, while Democrats say the budget passed by the GOP-controlled Senate is filled with draconian cuts. Activist Tim Potts of Democracy Rising Pennsylvania says even though House Democratic leaders aren’t seriously considering the Senate budget, it’s a good indicator of where Republicans stand. He says he’s hoping the document can help both sides begin a serious conversation. He says, “Have a series of public discussions among all of the parties on the areas of disagreement. Why do you want to cut this? Why do you want to increase that? How do you want to pay for it? What we’re going through now is not particularly helpful, because it’s all posturing.” Potts says he doubts a budget can be passed before mid-August. Governor Rendell is expected to announce more cuts to his proposed 29 billion dollar spending plan soon. However, unless he trims a billion and a half dollars from his budget, he and Senate Republican leaders are still far apart on proposed cuts and possible tax increases.

Conference Explores Impact of Class

A conference this week will explore how class affects us socially and economically. Understanding that may be more important now than at any other time since the 1930s, says Nick Coles, who's co-chairing the Working Class Studies Association conference. Coles says the increasing wage gap, decreasing unionization and the recession all point to class divisions.

This is the first time Pittsburgh will have hosted the conference. Coles says it's a good fit because of the city's deep industrial and labor history, and its ongoing transformation to a greener economy. The White House cited similar reasons for scheduling the next G-20 summit in Pittsburgh. Coles says he was pleased to hear Pittsburgh was getting that kind of recognition... and he believes the G-20 summit will come up during the conference.

In addition to speakers and panel discussions, the conference will include music and poetry readings. Conference participants will also tour historical sites in the Pittsburgh area, including the Pump House in Homestead, and the Carnegie Library in Braddock. You can more information and a schedule here.

Yuck! Yanks do nothing against Pavano, and Coke isn't it

Yesterday was one of the most frustrating Yankee games I've watched all year. And I'm still a little bit irked by the outcome. I complained to Squawker Jon last night about the loss, and he muttered something about how "you Yankee fans want to win every game." And that attitude is wrong, why exactly?

Losing is one thing, though, but the way the Yanks went about their business yesterday was very frustrating. First off, it was bad enough when the Yankees nearly lost to Carl Pavano the first time around this year. But that's understandable, I guess, given that they didn't know what he looked like pitching. Making him look like an ace for the second time this season? Unacceptable.

Speaking of American Idle, I read that Pavano said about his time with the Yankees, "I have no regrets." Of course he doesn't. He got $39.95 million for sitting on his (bruised) butt for four years. What could he possibly regret - whether he should have bought a Porsche or a Ferrari with his ill-gotten gains? Whether he should eat foie gras or caviar? Whether he should buy a mansion or a penthouse apartment? Sheesh.

While the Yanks weren't able to do anything against Pavano, they did tie the game off the Cleveland bullpen. But I had no faith that the Yanks would win after Jorge Posada hit into a double play. Part of the reason that play happened was because Brett Gardner, who misplayed a ball earlier in the game, ignored Joe Girardi's steal sign:

"They did want me to steal, and I didn't go. I should have. Another mistake," Gardner said.

Ya think?

You know how John Sterling always opines about how leadoff walks in late innings are so costly? He's right. And Phil Coke didn't just walk the leadoff batter, Trevor Crowe, in the ninth, he complained about the umpire's call, saying "I thought it was a strike." Not cool.

Dave Robertson wasn't any great shakes, either, giving up the winning hit to Jhonny Peralta. All in all, it wasn't exactly a red-letter day for the Yankees.

And to top it all off, my Squawker partner was up close at yesterday's Met game, breathing in all sorts of germs. Your Yankee-hating is nauseating enough, Jon; you'd better not make me literally sick as well!

The one bright side to yesterday's debacle was Chien-Ming Wang looking like himself. He pitched three lights-out innings, and looked much more impressive than starter Phil Hughes. Thank goodness for small favors.

What do you think about yesterday's loss? Leave us a comment!

Pitt Prof: G20 is a Big Deal

University of Pittsburgh economics professor James Cassing says one of the most important aspects of a G20 meeting is to allow the heads of state to publicly announce agreements that have been made in private meetings leading up to the gathering. He says with the economic downturn, it is also important for the world to see that the leaders of the world’s richest nations are on the same page when it comes to righting the world economy. He says it is “confidence building.” The “G” groups began with the G-7 and have expanded to included 19 countries and the European Union. Cassing says that expansion was important because it brought in some of the world’s largest developing economies including China and India. G20 meetings have attracted protests in the past. Cassing says anytime heads of state gather there will be protests but he understands why this group would attract even more. He says many people believe it is these leaders that have caused the problems the world economy is facing and they should not be trusted to fix the same problems. Cassing believes that among the topics to be discussed in September will be funding the G20’s commitment to the international monetary fund (IMF), the operations of the World Bank and the stalemate at the Doha Development Round. The Doha Round is aimed at lowering international trade barriers including tariffs. It has stalled with the US, Japan and the EU digging in on one side and India, Brazil, China and South Africa on the other side. Cassing agrees that this will raise the international profile of Pittsburgh. He says the event will make headlines around the world and with that many reporters in town there is bound to be coverage of issues outside of the event itself.

Port Authority Asks for Public Feedback

The Port Authority of Allegheny County will be hosting two open house programs this week. The June 3 event will take place downtown at the Omni William Penn Hotel's Urban Room, from 8 a.m. to 8 p.m. The June 8 event will be held at the University of Pittsburgh's Alumni Hall, in the Connolly Ballroom. That event will run from 2 to 5 p.m., and from 5:30 to 7:30 p.m. Area residents are encouraged to leave feedback on the laptop computers that will be set up at the open houses. No formal presentation will be given; rather, information will be on display and Port Authority officials will be around to answer questions. One can give feedback and find additional information at the Port Authority's website.

While You Were at ASCO

Hey you'll never guess, but there was an oncology meeting down in Mickey-Mouse land this weekend. No, seriously. Small group of cancer docs, it flies below the radar. Yeah that's probably why you hadn't heard of it. Say it with us: Aaasssssccccoooooohhhhh. No, ASCO.

There have been announcements galore from the annual meeting, and some interesting discussions as well. Mary Jo Laffler reported last night on a compare and contrast of FDA and EMEA, where FDA's oncology chief Richard Pazdur observed “EMEA is not the FDA of Europe, and the FDA is not the EMEA of the United States.” And this morning we wrote that Merck and AstraZeneca are announcing a tie-up in the oncology space, a rather limited but still significant deal to test the industry's most advanced mek and AKT inhibitors together in an early-stage clinical trial. We'll have more on that deal in The Pink Sheet DAILY later this morning.

Did you take the weekend off (god forbid!)? Well then, get ready for an onslaught of oncology development news. While you were winning #250 ...

• Some non-cology news to cleanse the palate: WSJ reported late friday night that Elan was close to selling a minority stake to Bristol-Myers. Reuters follows that up with this update, which includes a rumor of a second suitor (no word if second suitor is positioned on the grassy knoll). [UPDATE: Or, maybe BMS isn't buying, says Bloomberg.]
  
• Herceptin boosts survival in Her-2 positive stomach cancer patients.
  
• That fluorinated version of Nexavar that Onyx isn't happy about? Seems to be working just fine, says Bayer.
  
• Calistoga's PI3k inhibitor advances through Phase I, with flying colors.
  
• Genentech has released full results of its C-08 trial of Avastin in the adjuvant colorectal cancer setting. Full coverage from The Pink Sheet DAILY, here.
• Good data in lung cancer from (separate) studies of Lilly's Alimta and OSI's Tarceva.
• Glioblastoma data on drugs from Merck KGaA and BMS/Exelixis look good.
• There are six hundred more press releases and probably six hundred more on the way. Tell you what, get the rest of the headlines here and check back in with us later today. More to come!

image from flickr user StevenM_61 used under a creative commons license.

Merck/AZ Cancer Deal: Will Intra-Big Pharma Development Deals Move Beyond the Serendipitous?

Is that a mek inhibitor, sir?

Merck and AstraZeneca are expected to announce today that they're teaming up to test a combination of two early-stage oncology candidates. The companies are billing the deal as a first-of-its-kind collaboration--and fair enough: we can't think of another time two large companies have done this kind of deal with two molecules so far from the market.

The Big Pharmas will test Merck's MK-2206 and AZ's AZD6244 (a.k.a. ARRY-886, the compound was acquired from Array Biopharma in 2003) in a Phase I safety and tolerability trial. Costs will be split evenly, the program will be steered by a joint committee, and Merck is the sponsor of the trial.

The reason so few Big Pharma-Big Pharma development deals get done is that they're very tricky; control, valuation, overlap with other, non-partnered projects--these and other things present high hurdles for two large companies to come together in even basic ways. Of course there are plenty of reasons to take a stab at such deals--several of which are outlined in this February IN VIVO piece from Bain & Co. But if these alliances aren't discouraged institutionally, they're certainly not highly sought after either. In fact this deal came about not through any lets-be-friends business development outreach program at Merck or AZ, but by chance encounter.

"This was driven by two scientists meeting at an airport security checkpoint," Merck chief strategy officer and SVP worldwide licensing and external research Merv Turner told The IN VIVO Blog.

One scientist from Merck, one from AZ, they got chatting, and presumably between removing their laptops from their cases and putting their shoes back on, the special and awkward intimacy that comes from publicly surrendering all liquids and being patted down by a stranger wearing latex gloves worked its magic. WSJ's Ron Winslow has more color on the actual conversation, which apparently included that old chestnut "Are you the mek guy?"

"Of course through competitive intelligence they had some information about what each company was up to ... and they said to one another, there’s a compelling rationale for getting these molecules together," lets get the business development groups on the case, says Turner.

That airport rendezvous was in Dublin in November 2007. That it took more than 18 months to ink a deal to conduct a combination Phase I program says as much about the complexities of oncology drug development as it does the difficulties of intra-Big Pharma dealmaking.

Merck's MK-2206 is, according to Merck and AZ, the most advanced AKT inhibitor in development. AKT acts just downstream of PI3k in that important cancer cell survival pathway (the one generating all those deals lately); Phase I data on the drug were presented at this weekend's ASCO meeting. AZ's '6244 hits mitogen-activated protein kinase 1 (mek), an actor in an important parallel signaling pathway. Like the Merck compound, '6244 is further along than its competitors; the candidate has completed several Phase II monotherapy studies and its Phase II program continues apace.

A greater understanding of cancer biology, says Turner, should drive more deals like this one, where "the potential to short circuit what could otherwise be a long and combinatorial approach to finding the right pairs" of oncology therapies "becomes quite compelling."

There are over 800 molecules in development for various cancers. "We're learning more and more about the nature of tumorogenicity and the pathways involved and therefore how to select targets and populations expressing those targets ... and as we go forward into the new mechanism-driven approaches to tumor biology the rationale for combining agents which target complementary pathways becomes more clear," explains Turner.

Of course Merck is developing its own mek inhibitor and AZ its own AKT inhibitor, there are multiple targets in each pathway, and such compounds could be useful in a variety of cancers where the companies have individual ongoing programs, all which could complicate a more extensive deal.

"When we set out on this, to try to think through all the possibilities, we soon realized that the number of branches that arise if you try to construct a decision tree of all the things that might happen in development, it just becomes overwhelming," says Turner. So the companies are starting slowly, taking a step-wise approach to collaboration that need not go beyond this Phase I program.

We decided, "let's start with the easy part, work out how we'll do these experiments together in patients in Phase I, and if that succeeds, we'll go on to the next part," he says.

If the eventual goal is some sort of fixed-dose combination the companies will eventually have to jump in with two feet, perhaps partnering on multiple compounds or even entire pathways. But that need not happen at all. "The first goal could be to have each party arrive at the marketplace [independently], with a label statement that supports use of the other agent in combination," says Turner.

A small step, but a step forward, and the kind of thing that if repeated often enough could have some meaningful impact on drug development costs and speed to market, eventually advancing the standard of care in difficult diseases.

We presume this means taking another step, beyond chance encounters in airports or the DMV or even Starbucks. "If this works as advertised," sums up Turner, "we can think of it as a template for future similar deals."