Deals of the Week Goes Hollywood

It's not every day that a biopharma company swaps dreams of developing a blockbuster for dreams of developing a different sort of blockbuster (GSK's documentary dreams notwithstanding) but today ImaRx Therapeutics is doing just that. The erstwhile vascular therapeutics play was trading about 99% off its IPO price last we checked in -- investors had seemingly given up on blockbusters of the first variety.

Well, say goodbye to ImaRx, now just a shell of a company anyway. Say hello to Sycamore Films.

Sadly it's unfortunately not very uncommon for a biotech to meet its demise, especially in today's environment. But it did get us thinking. If the biopharmaceutical industry were a movie, what would it be? (C'mon people, it's Friday.) The first one that springs to mind for this blogger is Risky Business. (Of course the medical devices world needs its own movie too: this bit of Medtronic news has us thinking about the end of Se7en ... "what's in the box??!?!")

Your suggestions in the comments, pls. Meanwhile, not so long ago in a conference room not so far away . . .

Gen-Probe/Pacific Biosciences: Molecular diagnostics provider Gen-Probe, one of the original developers of nucleic-acid-based diagnostic test platforms, is getting into the sequencing game, via a $50 million investment in privately held Pacific Biosciences, part of the sequencing company’s Series F. The companies will also co-develop systems based on PacBio’s single-molecule sequencing technology aimed at the clinical diagnostics market. They will work exclusively with each other for two-and-a-half years on the program. Several other companies including IBM, Illumina, Life Technologies, Oxford Nanopore Technologies, and newcomer Ion Torrent are developing real-time, single-molecule sequencing technologies, with some geared towards eventually being able to look at the entire human genome. The move by Gen-Probe appears to be part of a strategy gaining favor with life science tools providers to provide an integrated sequencing offering including sample prep, sequence measurement, assays, and perhaps even bioinformatics in one package. Expectations are that technical validation of these systems will come in the next five years, and with sequencing costs rapidly decreasing – one start-up recently suggested the capability for whole-genome sequencing at under $100 around year-end – the clinical diagnostics market appears to be within reach for these companies. --Mark Ratner

Tranzyme/Norgine: In seeking a European development and commercialization partner for ulimorelin, a ghrelin agonist about to enter Phase III in gastrointestinal dysmotility disorders such as post-operative ileus, Tranzyme Pharma thinks it found the perfect fit. Tranzyme’s June 16 tie-up with Netherlands-based Norgine BV includes only $8 million up-front. But more importantly to the North Carolina biotech, the deal leaves it with North American rights to its lead program, while Norgine obtains rights in Europe, Australia, New Zealand, the Middle East and Africa. In addition to Norgine’s focus on gastrointestinal disorders, CEO Vipin Garg said one of the factors he likes best about the partnership is the regional nature of the deal and in particular that Norgine is “pan-European” rather than specializing in its home market or just a few countries. “A lot of companies want worldwide rights nowadays for products [or] just US or North American rights," told “The Pink Sheet” DAILY. “In our case, we wanted to retain those rights for ourselves and perhaps partner them later or even have the ability to build a small sales force” to sell the drug to hospital-based docs. Beyond the upfront payment, Tranzyme also is eligible to earn up to $150 million in development, approval and commercial milestones; Garg would not break down the biobucks specifically other than to say that the first milestone would be realized upon completion of the first Phase III trial.—Joseph Haas

Bayer/OncoMed: OncoMed Pharmaceuticals pulled in an eyebrow-raising $154 million Series B round in 2008, but investors apparently aren't the only ones that think the company is on to something. The cancer stem cell-focused biotech has signed its second major pharmaceutical collaboration – the only two significant deals in the space to date. The Redwood City, Calif., firm received $40 million upfront June 17 from Bayer Schering Pharma to co-discover and co-develop five agents that target the Wnt cancer stem cell pathway. The new partnership follows a 2007 deal with GlaxoSmithKline in which privately held OncoMed received an undisclosed upfront payment and equity investment in exchange for option rights to four monoclonal antibodies targeting the Notch cancer stem cell pathway. With potential discovery, development, regulatory and sales milestones, the deal with GSK was valued at up to $1.4 billion. The Bayer/OncoMed tie-up is similarly risk-adjusted: for starters, the German pharma gets an option to license development and commercial rights to antibody and protein therapeutics developed under the collaboration up through completion of Phase I. OncoMed can receive up to $397.5 million in milestones for each antibody or protein therapeutic developed and commercialized successfully, along with double-digit sales royalties. OncoMed will also assist Bayer in developing small molecule cancer therapies that target the Wnt pathway, which could earn it up to $112 million per successful candidate.--JAH

Neurocrine/Abbott: Less than a month after Neurocrine Biosciences said it was seeking a partner to advance into Phase III its novel gonadotropin-releasing hormone (GnRH) antagonist, elagolix, it sealed a deal with Abbott. Abbott agreed to pay $75 million upfront to develop and globally commercialize elagolix for the treatment of endometriosis-related pain, and undertake Phase II studies for the treatment of uterine fibroids. Neurocrine, a bit of a comeback tale since losing lead asset indiplon a few years ago, also could earn up to $500 million in milestones, mainly tied to pre-commercial achievements, and will receive undisclosed sales royalties. In addition to endometriosis and uterine fibroids, Neurocrine believes elagolix could be used to treat prostate cancer and benign prostatic hyperplasia, since the drug lowers testosterone levels in men. Though Neurocrine had been in talks with several potential partners, Abbott's experience with the GnRH mechanism made it an ideal fit, President and Chief Executive Kevin Gorman told “The Pink Sheet” DAILY. Abbott sells Lupron (leuprolide), an injectable GnRH agonist, which is one of two approved therapies for endometriosis. Leuprolide also is indicated to treat prostate cancer, which Gorman said adds value to the deal since elagolix is in preclinical studies for this use.--Carlene Olsen

Neurocrine/Boehringer Ingelheim: Sequels aren't usually as good as the original and this is frankly no exception. But Neurocrine's second deal this week, announced less than a day after its deal with Abbott, is nothing to sniff at either. Neurocrine on Thursday inked a pact with Boehringer Ingelheim to discover and develop small molecule GPR119 agonists to treat type-2 diabetes and other indications. Neurocrine gets $10 million up-front plus research funding and is elgible for development, regulatory and commercial milestone payments and royalties on any products BI develops from the collaboration. GPR119 is a GPCR thought to play a variety of roles in inducing insulin secretion; BI has made no secret of its desire to become a player in diabetes, though it hasn't done many deals. --CM

Covidien/Somanetics: Call it the Covidien Creep. Just as the medical device company moved slowly into the vascular and neurovascular business with the successive acquisitions of Bacchus Vascular, VNUS Technologies and this month's $2.6 billion acquisition of ev3 Inc., Covidien now is building its oximetry and monitoring products with its second sizable acquisition in less than a year with the purchase of publicly traded Somanetics Inc. Covidien agreed to pay $250 million, or $25 per share, for the company, seller of the INVOS System, which measures blood oxygen levels in the brain of surgical patients so clinicians can detect and correct a variety of threatening complications. The technology pairs nicely with the Bispectral Index, the only system capable of measuring the effects of anesthesia and sedatives on the brain. Covidien added the Bispectral to its oximetry and monitoring group last year by acquiring Aspect Medical Systems Inc. for $210 million. The combined revenues from Aspect and Somanetics will add $150 million in annual revenue to the Oximetry and Monitoring group, which reported $636 million in revenue in each of the last two fiscal years. Even with the additional revenue, oximetry and monitoring will likely be the fourth largest in Covidien’s medical device unit but that could change with future acquisitions.--Tom Salemi

Basilea/Almirall: Switzerland's Basilea Pharmaceutia has signed on Spain's Almirall to be the exclusive distributor of Basilea's eczema treatment Toctino (alitretinoin) in 10 European markets and Mexico. Now Basilea can benefit from broader sales of Toctino without making costly investments to build its own commercial infrastructure in Austria, Belgium, Czech Republic, Italy, Luxembourg, Mexico, the Netherlands, Poland, Portugal, Slovakia and Spain. At the same time, Almirall, a top 10 dermatology country in Europe, gains a novel therapy for its portfolio – Toctino is the only therapy approved for adults with severe chronic hand eczema unresponsive to potent topical corticosteroids. Almirall will make an upfront payment of €5 million, and Basilea also could receive milestone payments related to the launch of Toctino in two key markets of up to €11 million, plus €11 million more in pre-specified sales milestones. Basilea also retains the right to co-promote Toctino in selected markets. Though Basilea would not disclose its transfer price for Toctino, Merrill Lynch analysts estimate that the biotech will receive 44 percent to 55 percent of the product's revenues generated in Almirall's distribution markets. Toctino's fortunes are especially important for Basilea given the high-profile failure and break-up with Johnson & Johnson over its next likely commercial candidate, the anti-infective drug ceftobiprole. Since then, the biotech has made aggressive moves to regain its footing, including a licensing deal with Astellas Pharma earlier this year. --CO

image from flickr user emma.kate used under a creative commons license

Hard to Get Excited about BI's Flibanserin

You might have missed the 12th Congress of the European Society for Sexual Medicine in Lyon, France, this week. If you did, US Phase III results for Boehringer Ingelheim's flibanserin might have passed you by, too.

The drug--a serotonin 5-HT1A receptor agonist, 5-HT2A antagonist and partial dopamine agonist--is in development for Hypoactive Sexual Desire Disorder among pre-menopausal women. The condition is characterized by a decrease in or lack of sexual desire "that causes distress to the patient, may put a strain on relationships, and is not due to the effects of a substance....or another medical condition."

So we're not going to downplay the importance of this condition, despite suspecting that many might be surprised to learn that it is one--including most women suffering from it, according to Dr. Sheryl Kingsberg of University Hospitals Case Medical Center in Cleveland, Ohio. (Prevalence may, according to Kingsberg, be as high as one-in-ten.) We won't downplay it, even while predicting it will provide more fodder, if ever there was fodder, for industry critics seeking evidence that pharma invents diseases.

But we can't help raise some red flags when it comes to the likelihood of getting this drug past the regulators (let alone the reimbursers) for HSDD. Aside from whether the disease exists (and granted, we mustn't forget that depression was ignored/denied for many years), there's the issue of highly-subjective scoring and accounts in the trials. (How else to run a study measuring how many 'satisfying sexual events' (SSEs, another new acronym for you) a woman has, and just how satisfying they are, aside from asking her to write it into her e-diary?)

Then there's the issue that the pooled data from these two, six-month Phase III trials among a total of over 1,300 pre-menopausal women wasn't exactly compelling (at least to our untrained eye...): women in the highest-dose flibanserin group enjoyed an increase of only about one SSE per month compared to those on placebo. (And it doesn't appear from the release that there was even a statistically significant increase in primary endpoint SSEs in the European flibanserin trials.)

Meantime, and here's the real crunch, 15% of women in that same high-dose flibanserin arm dropped out due to side-effects (versus just 7% on placebo) which included daytime sleepiness, dizziness, fatigue, anxiety, dry mouth, nausea and insomnia. Not to worry, said lead study author and professor of psychiatry and neurobehavioral sciences at the University of Virginia, Anita Clayton, MD, on a webcast announcing the results. "These are side-effects often seen with CNS-acting medications, which affect the brain. They tended to be transient."

For the women, we can only hope those discomforts were worth it for the additional SSE. As far as the regulators go, we reckon it's unlikely that they wave through a centrally-acting drug (in the same broad class as Arena's Phase III obesity candidate lorcaserin, or Sanofi Aventis' insomnia hopeful eplivanserin, which received a complete response letter in September) whose complete mechanism of action is unknown, and which leads to considerable (if not apparently too serious) side-effects, for an indication that took 20 minutes to describe on a recent webcast announcing the results. (Flibanserin is thought to affect the sexual desire/drive component of HSDD, by acting on brain neurotransmitters.)

We're not saying this drug candidate will never be approved; we're just saying we think it's unlikely to happen fast. (Fortunately, Boehringer has other, far bigger, fish to fry.)

Granted, there aren't currently any FDA-approved drugs for HSDD among pre-menopausal women, explains Anita Clayton; couples counseling is about it. And if the SSE data wasn't that exciting, women did report significantly improved sexual desire & functioning, and less distress related to low sexual desire.

image from flickr user michelle brea used under creative commons license

DotW: The Jury Is Out

Is the biotech financing climate warming? As the WSJ pointed out yesterday, big deals such as Sanofi's licensing of Exelixis' PI3 Kinase Inhibitors (see below) and JNJ's acquisition of Cougar Biotech might suggest it's time for more optimism in our industry, as does the good news we report below for Cytokinetics.

Still, for a large portion of the sector--notably small cap biotechs whose products or clinical trial data are far from perfect--we suspect the struggles to find financing at a reasonable price continue.

Metabasis, a San Diego-based biotech focused on liver and metabolic disease, is a prime example. Unable to get additional funding , the biotech announced on May 27 that it would be reducing headcount by 85% to just 7 employees. Execs at Curagen likely know what remaining staffers at Metabasis are going through. In February the Connecticut company announced it was looking at strategic options; this week comes news of its sale to Celldex Therapeutics (see below).

And it's likely there will be more examples in the weeks to come. According to Simos Simeonidis, a senior biotechnology analyst with Rodman & Renshaw, "there are still a number of small-cap companies that will fall victim to the crisis and will either go out of business, merge or be taken over at low valuations.” (You can read more about Simeonidis' views of the industry in an upcoming Pink Sheet story, scheduled to appear Monday June 1.)

The jury is out on a number of other big issues as well, including CSL's planned take-over of Talecris. Do recent moves by the FTC signal a more judicious view of mergers under the Obama Administration? Shaking our magic eight ball, we say...the jury is still out, but the consequences could be huge--$3.1 billion big to be exact--for Talecris' PE-backers, Cerberus Partners and Ampersand Ventures.

And then there's the niggling question of rights to Remicade and Simponi. J&J finally made a move this week, asking for arbitration regarding ownership of the anti-TNF bluckbuster and its next-generation follow-on. In a press release, the diversifed pharma noted: "As its public statements have made clear, Merck is acquiring Schering-Plough. The acquisition constitutes a change of control that triggers the right of our Centocor Ortho Biotech subsidiary to terminate the agreements." Seems like the pharma wasn't fooled by all that reverse merger mumbo jumbo and Merck CEO Dick Clark may have to pay for his sandwich--and the loss of Remicade and Simponi--after all.

As you ponder these weighty issues and make your own rulings, take time to peruse...


DxS/Boehringer Ingelheim: There's been no official ruling in the industry about the business model for companion diagnostics, but that hasn't stopped DxS from inking deals. The company's latest pact: an agreement with Boehringer Ingelheim to develop a companion test for the pharma's BIBW 2992 (also known as Tovok), a novel tyrosine kinase inhibitor being tested in non-small cell lung cancer that acts by irreversibly blocking two promoters of tumor growth, the epidermal growth factor receptor (EGFR) and HER2 receptor. Because BIBW 2992 is more effective in patients carrying mutations in the EGFR gene, DxS will aim to develop a test to detect those genetic differences, allowing for the potential segmentation of lung cancer patients and a more personalized approach to therapy. Financial details of the deal were not disclosed. DxS is one of a number of companies to embrace the possiblity that there are real revenues to be had from companion tests, especially in oncology, where the drumbeat for individualized therapies grows ever louder. Last December, DxS signed a US-centered deal with Amgen to provide a companion diagnostic for the Big Biotech's colorectal therapeutic Vectibix. The test maker's so-called TheraScreen K-RAS test is already on the market in the EU and is used to help doctors determine which patients are unlikely to respond well to anti-EGFR therapies such as Bristol-Myers Squibb/ImClone's Erbitux (cetuximab) and Amgen's Vectibix. Moreover, DxS and Amgen have collaborated since last year on selling TheraScreen K-RAS alongside Vectibix in Europe, where the drug is cleared for patients with refractory metastatic colorectal cancer in which there is no K-RAS mutation.

Celldex Therapeutics/Curagen: The jury ruled this week on the case of Curagen and an independent future and decided overwhelmingly against said biotech. On Friday May 29, Celldex Therapeutics, which last year reverse-merged with Avant Therapeutics, announced it was acquiring the Connecticut-based biotech in a tax-free stock-for-stock transaction that values Curagen at approximately $94.5 million. The acquisition adds a portfolio of 11 oncology-focused antibodies to Celldex's immunotherapy medicines, including CR011, a fully human mAB-drug conjugate in Phase II trials to treat metastatic breast cancer and late stage melanoma. Perhaps evem more valuable is Curagen's on-hand cash: the $54.5 million Celldex stands to gain will go a long way to helping fund its pipeline, which includes CDX-110, a potentially break-out cancer vaccine for glioblastoma in Phase II trials and the subject of a partnership with Pfizer in 2008. The news announcement Friday brings to an end the questions about Curagen's specific future, the basic outlines of which had been mapped out in February, when the company disclosed it had hired an investment bank to explore "a broad range of strategic alternatives." The company's stock had been in freefall since a Phase II mucositis drug, velafermin, blew up in clinical trials. The failure of velafermin, and the subsequent decision to exit a partnership with Denmark's TopoTarget for the HDAC inhibitor belinostat, left Curagen a one-trick pony, dependent on the success of CR011. And CR011 is far from a slam dunk. Antibody-drug conjugates have had mixed success in the clinic, with only Wyeth's Mylotarg for acute myeloid leukemia garnering FDA approval.

Amgen/Cytokinetics: With so many option-alliances and option-acquisitions getting signed these days it’s nice to have a reminder that yes, options do in fact get exercised. On Tuesday Cytokinetics said that Amgen was picking up its option on the smaller biotech’s cardiac contractility program, triggering an option payment of $50 million. The program’s lead candidate, the heart failure drug CK-1827452, is a small molecule cardiac myosin activator in Phase II. Back in 2006, when Amgen originally inked its option deal with Cytokinetics, the biotech received a $75 million up-front payment. This latest deal means the small company is now eligible for pre-commercial milestone payments totaling $600 million. What’s more, Amgen now foots the bill for ‘452’s development, cooling the burn on Cytokinetics’ newly boosted $145 million cash balance. It’s all about the runway, people, and Cytokinetics can now see as far as 2012. For a full discussion of Cytokinetics development strategy for ‘452 and a look at how investors in a recent registered direct offering of Cytokinetics shares could make out like bandits, check out the coverage over at The Pink Sheet DAILY--Chris Morrison.

Sanofi-Aventis/Exelixis: One target area the Big Pharma Jury has ruled on: PI3 kinases. And the verdict? KA-CHING! At least that's the case for Exelixis, which cashed in May 28 in a big way in a deal with Sanofi-Aventis. In exchange for $140 million up-front, Sanofi gains world-wide rights to Exelixis's two earlyish-stage clinical compounds, XL147 and XL765 (both are in Phase Ib/II). In addition the two companies will collaborate on the discovery of new, isoform-selective PI3 kinase inhibitors for oncology indications. They will each contribute preclinical compounds for development work, but Sanofi shoulders the cost of the work to the tune of $21 million for the next three years. Importantly Exelixis will reap downstream benefits no matter which companies' molecules are chosen for clinical studies. This latest deal has the requisite biobucks--north of $ 1 billion plus double-digit royalties for XL147 and XL765--that we've come to associate with traditional pharma-biotech deals (it will be quite another matter if said money actually materializes). As Chris Morrison wrote yesterday, IN VIVO Blog is more impressed with the size of the upfront, which is on-par with the biggest clinical-stage deals so far this year: Novartis' global license to Portola's Phase II cardiovascular candidate elinogrel and BMS's deal for Zymogenetics interferon lambda. The out-sized deal price suggests that assets deemed "too good to pass up" still command high value, despite the economic climate. For Sanofi the Exelixis deal is just the latest sign that partnering is in the ascendance at the French pharma, a message repeated recently at BIO, and it allows the company to catch up in an important emerging target area where it lacked in-house programs.

(Image courtesy of flickr user wallyg through a creative commons license.)

DotW: Going For Gold

Congratulations, Michael Phelps, on your sixth gold medal. We can only imagine the adrenaline rush as we tune in periodically from our own cube. (Kind of like the high we get writing these posts. NOT.)

But Phelps wasn't the only one turning in medal-worthy performances this week. Genentech certainly deserves at least a bronze for its neatly worded--some might even say restrained--reply to Roche's nearly $44 billion July 21 offer, which noted that the Swiss pharma "substantially undervalues the company." Go figure.

But lest you think there are hard feelings between the two companies, fear not. Charles Sanders, chair of the independent committee evaluating the offer, extended this olive branch to Severin Schwan and company: "In addition, we look forward to the company maintaining its successful relationship with Roche, regardless of ownership structure." (Certain politicos in Russia and Georgia might want to take note.)

As our sister publication The Pink Sheet Daily reports (subscription required), Genentech's response means Roche can now begin bargaining in earnest. Most analysts and industy experts expect Genentech will ultimately score gold (as in a lot more coinage). To seal the deal, Roche may have to offer upwards of $100-a-share to gain its biotech goose. The question is: can the Swiss giant still afford to feed the animal given the high cost? Or will the high price tag necessitate cost-cutting efforts that damage the high-flying culture Roche claims it's intent on preserving?


Speaking of getting air, in the high jump competition, keep your eyes on Oxford Biomedica, up more than 20% today after the beleaguered gene therapy company rejected a second takeover offer from GeneThera, and German generics play Stada, which rose 12% today on rumors of a buyout by always-acquisitive Teva Pharmaceuticals. Protherics could be the favorite to medal here, as the UK biotech was up a whopping 44% earlier in the week after it announced it was in talks with unidentified potential acquirers.

Olympic athletes know that speed isn't everything. Stamina is important too. (Imagine having the staying power to eat Michael Phelp's 12,000-calorie-a-day diet.) In our industry, the medal for stamina has to go to our favorite activist shareholder, Carl "oh yes, I can" Icahn, who bought up more shares of Biogen Idec after that biotech's stock price slipped on negative news associated with its MS drug Tysabri. Icahn's move suggests he may not be finished with the Massachusetts biotech, despite not being able to force a sale of the company roughly one year ago. (Meantime another Icahn holding, ImClone, also looks to be going for (more) gold. The company hasn't officially rejected BMS's $4.5 billion bid, but a NY Times story published August 5 suggests execs at the biotech are likely to oppose the sale at the current price.)

Your IN VIVO Blog team has stamina too. And someday we might even get a medal for the analysis we bring you week in and week out. (It won't be for the humor.) Until then, it's time for another edition of ...

AstraZeneca/Abbott: Carpe diem, says AstraZeneca’s Crestor group. It’s got a great opportunity to step-up its commercial attack on Lipitor (down about 10% in new prescription growth from a year ago) and, perhaps more importantly, Vytorin – down about 40% from a year ago, thanks to negative-sounding, albeit equivocal, data out of the ENHANCE trial and, more recently, similarly disturbing results from SEAS. Problem: AZ’s US business is sputtering, so now is not the time to add infrastructure. Meanwhile, Abbott’s big new launch, Simcor (Niaspan plus simvastatin), hasn’t tracked with expectations. So it's a perfect time for the partners who, since 2006, have been developing combinations of Crestor with Abbott’s new-generation fenofibrate (called TriLipix), to use a Crestor co-promotion to iron out, before the big test, some of the likely kinks in the joint commercialization of TriLipix/Crestor.

CSL/Talecris: Private equity took gold in this week's top bio-bucks deal. Cerberus Partners and Ampersand Ventures announced Tuesday that they were selling Talecris Biotherapeutics to the world's top maker of blood plasma products, Australia's CSL Ltd., for a hefty $3.1 billion. In addition, CSL will assume over $1 billion in debt amassed by the North Carolina player, which was started in 2005 when Ampersand and Cerberus snapped up Bayer AG's plasma products from Bayer's Biologics Products Division for $590 million. Talecris, which currently operates 56 plasma collection centres and two manufacturing facilities in the US, posted $1.2 billion in sales last year. The move by Talecris's backers has apparently been in the offing for months. Indeed Talecris may have been sniffing out M&A exits as early as last July, when it filed to go public. We've noted previously that many companies are now adopting a twin-tracking approach, entering preliminary talks with potential buyers while simultaneously filing for an IPO. Certainly given the stock-market turmoil and the lack of investors' appetite for risky IPOs, M&A was the quicker and more lucrative exit for Ampersand and Cerberus. By buying Talecris, CSL is betting the combined company will be able to capture a bigger share of the expanding market for plasma-based medicines, now a $7 billion-a-year market.

Schering-Plough/Shanghai Schering-Plough Pharmaceutical Co.: Schering-Plough caught Olympic fever, announcing this week that it has expanded its presence in China by acquiring shares of its former joint venture partners and folding them into a wholly-owned operation based in Shanghai. (Beijing is definitely too smoggy.) Financial details were not disclosed. (Clearly the Chinese already get S-P's corporate mantra: "earn trust, every day.) China has long been a focus of major pharmaceutical companies, of course. As drug pricing comes under tighter control in western countries and looming patent expiries will lower sales, the companies are looking for ways to expand into valuable developing markets such as China where an economic boom has created a thriving middle class eager to access Western medicines. AstraZeneca is among the leaders, with its Innovation Centre China, an R&D center based in Shanghai, and its strategic partnership with Peking University 3rd Hospital to open establish a Clinical Pharmacology Unit (CPU). In 2007, it took top selling honors from Pfizer in the country, increasing sales of its drugs from $85 million in 2001 to $423 million last year according to the WSJ.

Barr/BI: Barr Labs is busy showing us why Teva decided to plunk down nearly $9 billion (in cash, stock and assumed debt) to buy out its generics rival back in July. On Tuesday Barr announced agreements to settle its Mirapex (for Parkinson’s) and Aggrenox (an anticoagulant) patent challenges with Boehringer Ingelheim. Those drugs pulled in more than $700 million combined in the twelve months through May 2008, according to Barr. Not only has Barr nailed down early dates on which it can start to market its first-to-file generic versions of BI’s two drugs (2010 and 2015—10 months and 18 months earlier than the drugs’ challenged patents officially expire, respectively), it also inked a co-promotion deal with BI on Aggrenox. Barr’s Duramed division will co-promote the anticoagulant with its specialist women’s health sales force starting in March 2009 (BI will train them up in the interim), in exchange for undisclosed royalties. The two deals come not too long after Barr’s June victory in US District Court in the Mirapex litigation. That ruling found that BI had double-patented the Parkinson’s therapy, and likely forced the German company to enter into serious negotiations with Barr while it considered its appeal. Of course authorized generics deals have always seemed a bit sketchy in the eyes of Congress and the FTC, among others, so expect a thorough review.

Pfizer/Cytos: Swiss vaccines (jab-elin?) play Cytos Biotechnology this morning said it added Pfizer to its list of R&D partners. The Big Pharma is paying CHF10 million upfront and up to CHF140 million in milestones to access Cytos’ Immunodrug technology to develop vaccines against a set of predefined disease targets. Cytos will also receive research funding and potential royalties; Pfizer takes over development of any products at the preclinical stage. For Pfizer the move is the latest in a string of vaccines deals stretching back to the acquisition of PowderMed in late 2006; more recently the Big Pharma has bought Coley and inked a licensing deal with Avant for a brain cancer program in its efforts to beef up its vaccines efforts.

Thanks to Chris Morrison and Roger Longman, who pitched in with some additional reporting.