Are you Single-minded?

While the bulk of my posts have focused on developments in the Pharmaceutical industry, I also like to post occasionally on topics related to Career Development.
And along those lines, there is an interesting post here.

We often hear it touted that we should all strive to be well-rounded....that we should work to improve our weaknesses....that we should strive for a balanced life.

David Rendall does not agree with that philosophy. He writes:

"While you are busy diffusing your time and energy broadly in an effort to improve in a variety of different areas, someone else is obsessively developing their strengths and flaunting their weaknesses. They aren't allowing their weaknesses to distract them from focusing on the areas in which they have the greatest potential.

If you want to win, in your career or your business, you need to be singleminded. Don't let your weaknesses and the goal of being well-rounded keep you from a maniacal focus on improving your strengths."

I think his point is valid....Being successful in any one area requires sacrifice....including possibly giving up the pursuit of success in other endeavors.....

Rise in Hiring Activity

Good news for job seekers in the Pharmaceutical/Biotech sector....
We have seen a significant surge in hiring.
I am not sure if this is just a blip on the radar....or if this development is the start of an upward trend.

Nevertheless - for now - there is a lot of hiring going on....

Bristol’s $2.1 Billion Medarex Deal -Brilliance or Desperation?

The Wall Street Journal's Health Blog briefly discusses this week's acquisition of Medarex by Bristol-Myers Squibb here.

The article describes BMS as "an old-line pharma company sitting on a lot of cash ($8.1 billion as of the end of the second quarter, according to Bristol’s latest earnings report this morning) and facing the generic competition for its blockbuster Plavix in a couple of years." On the other side of the aisle, you have Medarex, which is more of the 'New Kid on the Block...the hot upstart Biotech with promising cancer meds in late stage development and testing.

The reality is this....The potential rewards of this acquisition are promising...but the price of admission is high.
According to the WSJ article..."Bristol is paying a 90% premium to Medarex's Wednesday closing price,..."

And a quick glance at Google Finance shows that Medarex earned $10 Million last quarter...but lost almost $47 Million.

So while the potential is there...the question is...Did BMS pay too much for some potential?
Is this a strategically brilliant move? Or is it one that smacks of desperation?

Celgene's Revlimid shows promise as first-line treatment

Reuters reports that:
"Celgene said its multiple myeloma drug Revlimid significantly improved progression-free survival in patients undergoing initial treatment. The study's findings could boost the chance of expanding Revlimid's use outside the U.S., the company said. The product is approved only for patients who failed to respond to other therapies. "

Very nice development for Celgene......

Pharma Death Spiral

Sally Church has another interesting post on her blog where she asks what Pharma companies are in the proverbial 'Death Spiral'.
There is no doubt about it....the Pharma/Biotech industry is going through a very dynamic time.
The reality however is that while there are a number of Pharma and Biotech companies that are in serious trouble, there are an even greater number of companies that are doing well. These companies are poised to not only survive in this new marketplace, but will actually thrive.

There will be losers in the industry...and change is inevitable. But we can rest assured that the industry will continue to thrive. Unless someone invents a pill that totall eradicates illness in all humans, the Pharma/Biotech industry as a a whole will continue to be successful.

Senate panel gives 12-year exclusivity to biotech drugs

The Senate Committee on Health, Education, Labor and Pensions approved a 12-year data exclusivity clause for Bitoech companies before they have to share their drug-making data with generic drug manufacturers. You can read the article here.

There was a strong push by the Obama administration for a seven-year exclusivity limit.

According to the article:

"Biotech companies had pushed for a longer period of data exclusivity because, they say, it can take 15 years and as much as $1 billion to bring a new medicine to patients. They say data exclusivity to recoup money they’ve invested to make the product.

But supporters of a shorter time limit say long-term data exclusivity gives profitable biotech companies an unfair monopoly on the costly drugs. They say their ability to make biosimilars - the lower-cost generic versions of the biotech drugs - will lead to lower health-care costs."

But the 12 year exclusivity period is by no means a done deal...the measure still needs approval buy the full House and Senate.

Stem cells used to repair heart damage

I know....3 posts in one day....But this story is absolutely fascinating...and this is why I love the Pharma/Biotech industry.

Your Biggest Weakness - How to answer this Interview Question

Over on the Recruiter's Roundtable at Yahoo Hotjobs there was a discussion regarding how to field one of the most commonly asked Interview Questions, "What is your Biggest Weakness?"
You can view the whole discussion here.

I thought the advice from Delynn Senna, Executive Director from Robert Half International, was excellent. She replied:

"There are times when I ask job candidates this question. It's not that I want to nitpick or make people feel uncomfortable, but rather I want to see in which areas they feel they need to improve and what they are doing about it. In order to advance professionally, we all need to be able to honestly identify not just our strengths but also our weaknesses and how we can upgrade in these areas.

I recommend that job candidates be upfront during interviews. Don't say you have "no weaknesses" or "work too hard." Instead, tell hiring managers what you are working on improving and what you've done to build your skills in these areas.

One thing to keep in mind: If one of your weaknesses is directly related to the position and could potentially take you out of the running, the opportunity may not be right for you."

Bottom line - the reality is that you should be honest. If you really have a weakness that would inhibit your ability to do the job....then you really should not be interviewing for it.

New Biotech Firms' Discoveries Need More Protection

Just read an interesting article here.

The article states that...

"According to a new study commissioned by the National Venture Capital Association....Early-stage venture capital-backed biotech companies should be able to hold exclusive rights on their medical discoveries for at least 12 years because their investors expect 20% returns to repay them for the “extraordinary (investment) risk.”

However, the article goes on to say that:

"Legislators now formulating a new FDA approval process are assuming a 10% internal rate of return for venture capital fund investors."

The articles closes by saying:

"A shorter exclusivity period would make it difficult for venture capital backers of biotech companies to earn returns on these companies, according to the study by Joshua Lerner, Jacob H. Schiff Professor of Investment Banking at Harvard Business School; and Iain Cockburn, professor of finance and economics and Everett W. Lord Distinguished Faculty Scholar in Boston University's School of Management."

I think the article is spot on.
The reality is this....no one is going to assume risk without the promise of some reward!!
It is that simple.
However Congress seems to believe that Venture Capitalists are going to fall all over themselves to fund companies involved in risky drug projects and that these same Venture Capitalists will assume all of the financial risk if the drugs fail. Yet Congress assumes these same folks are going to do this without the promise of any real Return on Their Investment.

Sometimes this stuff just boggles the mind....

Talent is more expensive than capital

Great post over at Talentism entitled - Start: 20 Rules for Recruiting in the Creative Age.
You can read the whole post here.
But my favorite rule is Rule #1 [also repeated for emphasis as Rule #20].

1.) Talent is more expensive than capital.

Good companies remember this rule. Bad companies never learned it.

Japan approves first generic biotech drug

According just a story in Reuters that just broke here:

Japanese regulators approved a human growth hormone from Novartis AG, the first green light in Japan for a biosimilar or generic version of a biotech drug, the Swiss drugmaker said on Thursday.

Biosimilars are viewed as a promising new market, given the pent-up demand for cheaper versions of extremely expensive biotech drugs, some of which are coming to the end of their patent life.

Somatropin, made by Novartis' generics unit Sandoz, is for treatment of growth hormone deficiency in children and growth disturbance associated with Turner's syndrome or chronic renal insufficiency, the group said.

It will be interesting to see how this development plays out.....

Nobel laureate Richard J Roberts says "Future is in Biotech"

The recent economic woes have cast a pall over a wide swath of industries. The Pharmaceutical and Biotech industries have been particularly hard hit this time.
And for the first time in my 18 years as a Recruiter, I actually have candidates asking me how to transition out of the Pharma/Biotech fields.

But not everyone is despondent about the prospects for the industry.

Nobel laureate Richard J Roberts opines here that "The futures lies in Biotech."

Roberts says that despite the current economic woes, now is the best time to be in the industry. Roberts goes on to say:

"Recession is the right time for this because there are no competitors. The early bird always gets the worm....We still know very little about biology and the mechanisms of life. So this provides us with a huge opportunity to focus on areas that humanity needs most. Far from being a negative factor, the recession has provided us with an opportunity to plan and consolidate better."

Roberts adds that the "key thrust areas where the biotech industry can catch up are genetically-modified food, bio-energy, stem cell research, synthetic biology and personalised medicine."

Personally I think Roberts is right on the mark. The future for Biotech still burns brightly.

The Power of Weak Ties on Facebook

I just heard about this video and this website on Twitter today.
Shama Hyder has been named one of the 50 Most Influential Women in Social Media and she has a great video over at her site, Shama.Tv that discusses The Power of Weak Ties on Facebook. [Although the value of 'weak ties' extends not just to Facebook, but across all social media. And in fact, I think it is fair to say that, 'weak ties' have value in the 'analog' world as well :)]

I think not that only job seekers, but anyone who is looking to improve themselves, will enjoy this video. It is good stuff!

Creative Marketing Promotion - Free Hair Color For Job Hunting Women

This is a little off-topic from what I usually post about....but I thought this promotion by tng worldwide and Kemon was a really great example of some creative marketing coupled with companies offering a good old-fashioned 'helping hand' to the community. Kemon and tng worldwide are teaming up to offer free hair color for job hunting women in the Detroit area. You can read the details here.
The program is called Hair for Success.
According to the article:

Larry Gaynor, CEO and president of tng worldwide....convinced local salons to donate their time, talent and services for the Hair For Success event, while tng worldwide is supplying the Kemon coloring product that stylists will be using on the women. It is one of the most sought after color products in the industry. Gaynor expects to help 2,000 women during Monday’s event by giving away about $100,000 in professional color treatments.

This program is a great example of 'giving before you get'. And it seems like this event will be a winner for all who are involved.....

Be Professional when Job Hunting

Marvin Walberg has a good article with some basic common-sense tips about how to conduct yourself on your job search. You can read the article here.

One of his tips is as follows:

Get a permanent and appropriate e-mail address. If you want, use one for friends and fun and another for business, using your name or initials — no cutesy names like hotmamma1795@hotmail.com, or — well, you know what we mean.

Now you would think that most people would know that they should use an appropriate email for their business related conversations....but that is not always the case. Years ago, I had a candidate that had an email address that was, shall we say, somewhat pornographic in nature. It was listed at the top of her resume. When I mentioned to her that she may want to consider using another email address for her job search, she balked at the suggestion.

Needless to say, I did not spend any more time working with her.

Palm's Pre Proves The Value of Recruiting Talent

Greg Kumparak over at MobileCrunch writes here about the resurgence of Palm.
How did Palm do it? They went out and recruited the people that they needed. And did they simply post a couple of ads and hope the right people responded to them?
No - Palm went out and aggressively recruited the talent that they wanted and needed from their competitors.

Kumparak writes:

"In early June 2007, Palm was teetering on the edge of obscurity. Their flagship Treo product line had gone stale, numbers were down across the board, and rumors of a sale were abound. On June 4th, 2007 it was announced that Elevation Partners had purchased a 25% equity stake of Palm for $325 million. Flash forward to today; just two years later (almost to the day), Palm has launched the Pre, a phone which managed to nab the attention of just about every blog and blog reader out there.

So what changed? What had that new-found $325 million bought them? Talent. Lots and lots of talent - from their competitors, no less. With a good amount of lucky timing and some decent salary proposals, Palm managed to snatch up at least 8 people who were just oh-so-damn good at what they do, ending up with the Palm Pre and webOS as a result."

The moral of the story....if you want to build a quality organization....if you want to make products that people want to buy....you can't just passively sit back and wait for talented people to beat a path to your doorstep. You have to go out and find them!!!

Worker Burnout

Joel Cheesman writes here that workers who have survived layoffs are increasingly experiencing burnout. Joel writes:

"...according to CareerBuilder’s latest survey of more than 4,400 workers nationwide.

Forty-seven percent of workers reported they have taken on more responsibility because of a layoff within their organization. Thirty-seven percent said they are handling the work of two people. Thirty percent feel burned out.

To accommodate growing to-do lists, 34 percent of workers who kept their jobs after a layoff reported they are spending more time at the office. Seventeen percent are putting in at least 10 hours per day. Twenty-two percent are working more weekends."

Should be interesting to see if these 'burned-out' employees stick around...or if they end up moving on to other companies once the economic recovery begins.

Why should a company hire you?

Just a quick post...
I just got off the phone with a candidate.
I asked him - "Why should my client hire you?"

The candidate's response was to simply list their current job responsibilities.
Basically they rehashed the list of responsibilities that appears on their resume.

That type of answer will not get you hired!

Bottom line - on your interview - don't simply discuss your responsibilities.
Instead focus on talking about your accomplishments.

More on this topic later.....

J&J and the Merck/Schering Reverse Merger

J&J filed for arbitration to end its revenue-sharing deal with Schering-Plough, due to Schering's merger with rival drugmaker Merck.
The problem for J&J is that Merck and Schering designed their deal as a reverse merger.

Here is J&J's problem....This is traditionally how a Reverse Merger works (you can read the complete BioJobBlogger post here):

Generally speaking, a failing or failed publicly traded company that is listed on one stock exchange or another merges with a privately held company. The privately held company takes over the public stock listing and manages the day-to-day operations of the new business. Private companies that engage in reverse mergers are usually looking for cash infusions for product development or a stock listing (without going through an initial public offering) which offers it shareholders immediate cash value. Investors who previously held stock in the public company are either compensated for their shares in cash or given shares (at a negotiated price) in the new entity. Any cash (or assets) left in the public company can be used to develop the formerly private company’s product(s) and if successful, shareholders in the old public company can eventually benefit.

But last I checked, neither Merck or Schering is a private company. So why in the world would they do a reverse merger?

Here's why - Again, according to the BioJobBlogger:

Schering-Plough markets Remicade outside of the US under an agreement with Johnson and Johnson which sells the drug in America. A termination clause in the original marketing agreement stipulates that the ex-US rights to Remicade (and another drug being developed) would revert to Johnson and Johnson if control or ownership of Schering Plough changes. Remicade, a treatment for rheumatoid arthritis, developed by Johnson and Johnson’s subsidiary Centocor, represented $2.1 billion in sales for Schering in 2008. Further, about 70% of Schering Plough’s revenue comes from outside the US. That said, the success or failure of the deal really hinges on whether or not Johnson and Johnson will challenge the change-in-control clause for Remicade. To obviate that possibility, Merck devised an unusual reverse merger strategy in which ownership of Schering Plough will not change hands—at least on paper anyway. Instead, even though Merck is putting up the money to purchase Schering, and Richard Clark, Merck’s Chairman and CEO, will run the newly combined company, Merck would technically become a subsidiary of Schering Plough and consequently there would be no change in Schering Plough management!

It will definitely be interesting to see how the arbitration process plays out.

Where do you find the time?

I sometimes get kidded by my family and friends about the amount of time I spend on the various forms of Social Media. People who think nothing of sitting on the couch and watching a 3+ hour Yankees game...or hunkering down for a night of American Idol are always questioning me as to where do I find the time for my Blog, Twitter, Facebook etc.
Well, this afternoon I was reading Connie Crosby's blog and came across this post. Connie had embedded a video where Clay Shirky talks about this very issue.
Next time I am asked the question regarding where do I find the time...I will point them to this video.

Biotechs To Dangle Data for Cash at Cancer Drug Meeting

An article in today's Bloomberg paints a pretty bleak picture with regards to the prospects for a number of cash poor small biotechs. For some of these companies, this year's American Society of Clinical Oncology meeting will be their last attempt to obtain a much needed infusion of cash.
According to Steven King, Chief Executive Officer of Peregrine Pharmaceuticals Inc.

"Failing to secure a development partnership, or to be sold outright, may force research delays and project shutdowns that can add years to the time it takes to bring a drug to market, or end the effort entirely...The current economy has made this the most important year, of all the years I can remember, for small biotechnology companies to get the attention of potential partners and investors at ASCO."

Steve Elek, head of Health-care Transaction Service for PricewaterhouseCoopers LLC elaborates further that,

“Without access to capital, early-stage biotechnology companies are looking to sell when a year or two ago they would never think of it....Ideally they would be able to move along a little further in the process to maximize value, but the cash burn makes that not feasible for them. I expect to see a lot more biotech M&A activity over the next six to twelve months.”

Not an easy time to be a baby biotech.....

Jeff Kindler and Dunbar's Number

Interesting thought....the size of the group that Jeff Kindler proposes for a successful R&D group is 150 people....which is what Robin Dunbar postulates is the "theoretical cognitive limit to the number of people with whom one can maintain stable social relationships."
Coincidence or not....

Pfizer CEO’s Three Tips for Research Success

Jeff Kindler in today's Wall Street Journal's Health Blog gives this summary of what he feels will lead to success in today's Pharma industry:

1. Each group should have between 100 and 150 scientists — few enough that they can all get together in the cafeteria to talk about what they’re doing.

2. Each should be run by a chief scientific officer prominent in the field.

3. They should be left alone “to create their own culture,” and should be judged, for the most part, on a single metric: Discovering drugs that demonstrate proof of concept.

Bottom line - Kindler's blueprint for R&D success looks striking similar to what GSK is currently doing.

Indian drug sales to US plunge 40%

The Financial Times reports here that Drug Sales that:

"Indian exports of pharmaceutical products to the US fell almost 40 per cent in the five months between October last year and the end of February....The trend is likely to disappoint analysts. India's pharmaceuticals industry was touted as a sector that could weather the global financial crisis."

Interestingly, sales of Pharmaceuticals from companies in China, Israel and South Korea gained dramatically.

Networking: The Most Effective Way to Find a Job

Matt Berndt has an interesting post on his blog entitled - Networking: The Most Effective Way to Find a Job. In his post he cites the following statistic:

According to a survey of 2002-2004 graduates of the UT College of Communication done five years after graduation:

• More than 70% found their first job out of college via their networking activities
• More than 78% found their current job (five years after college) via their networking activities

He goes on to write:

Again, this doesn’t mean they ignored online job boards, they just didn’t depend upon them as their primary means of finding employment.

I agree 110%!!
I always tell candidates that networking....whether by using their own network contacts or by using a Recruiter's network of contacts is by far the most effective way to get a new job. And if you have exhausted your networking options....and are still unable to gain access to a specific company....then by all means use the job boards. But Job Boards should only be a last resort....not your first option.

Swine flu could jump start new drugs

What is bad news from a societal standpoint could benefit companies in the Biotech/Pharma sector.
Fortune Magazine details in an article here what companies stand to gain from the potential Swine Flu pandemic.

The pharmaceutical industry faces unprecedented barriers to evolution

Great article here that details the challenges that the Pharmaceutical industry faces as well as the potential solutions to these challenges. Not a long article - but very well written and informative.

Statins guard against Prostate Cancer

There is a fascinating article that was just posted on Forbes.com. You can read it here.
According to the article:

Several new studies suggest statins help prevent prostate cancer and reduce the risk of erectile dysfunction.

"At this point in time, there seems to be mounting evidence that there may be a future role for statins in prostate cancer treatment or prostate cancer prevention," said Dr. Lionel L. Banez, from the Division of Urologic Surgery and Duke Prostate Center at Duke University Medical Center and lead author of one study.

From a Men's health standpoint, this is great news.

great career advice

Someone just posted this quote on Twitter and I thought it is very sound advice:

"Someone with a job is never secure, someone with a calling is never unemployed."

Medical Devices Face New Scrutiny From FDA

This article appeared in the Wall Street Journal on April 8th.
According to the article:

The Food and Drug Administration asked several medical-device makers to justify their products' safety and effectiveness, as part of a move to require tougher evidence standards before products can be sold.

But here is the kicker:

The agency's request comes in response to a 1990 order from Congress that directed the FDA to gather rigorous evidence before a manufacturer can sell medical devices considered to be in the most risky category, known as Class 3.

But despite several attempts during the 1990s, the FDA hasn't finished implementing the law. In the past five years, it allowed hundreds of new Class 3 devices to be sold based on a less rigorous showing -- called a 510(k), after a section of federal law -- that they are "substantially equivalent" to combinations of other products marketed before 1976. Such evidence often is collected in a laboratory, not with a clinical trial in patients.

I know the proverbial wheels of Justice and Government grind slowly...but this is ridiculous.
This law has been on the books since 1990 and the FDA still has not fully implemented it.
And now the FDA is going back to the Manufacturers demanding more data on products that are already approved and on the market.....And these companies may actually have to go back and run Clinical Trials on already approved products.....Incredible!

Inspirational 97 yr. old doctor

This post is a little different from my standard subject matter. But I figure anyone who is 97 years old and is still working and productive is definitely worth listening to. Hopefully you find Shigeaki's message as uplifting and inspiring as I did. And you can read the whole article here.

An excerpt from the article is pasted below:
At the age of 97 years and 4 months, Shigeaki Hinohara is one of the world's longest-serving physicians and educators. Hinohara's magic touch is legendary: Since 1941 he has been healing patients at St. Luke's International Hospital in Tokyo and teaching at St. Luke's College of Nursing. After World War II, he envisioned a world-class hospital and college springing from the ruins of Tokyo; thanks to his pioneering spirit and business savvy, the doctor turned these institutions into the nation's top medical facility and nursing school. Today he serves as chairman of the board of trustees at both organizations. Always willing to try new things, he has published around 150 books since his 75th birthday, including one "Living Long, Living Good" that has sold more than 1.2 million copies. As the founder of the New Elderly Movement, Hinohara encourages others to live a long and happy life, a quest in which no role model is better than the doctor himself.

Pharma Innovation in Legal Jeapordy

Lawrence McQuillan writes a fascinating and frightening article regarding recent court rulings that will have a potentially tremendous negative impact on drug innovation. You can read the article here.
The recent Supreme Court ruling in Wyeth v. Levine (which held that even when a drug has been approved by the FDA, the drug manufacturer can still be held liable under state law) has garnered a lot of press.
But an even more frightening decision was rendered in CA in the case of Conte v. Wyeth.
McQuillan writes:

In Conte, a California appellate court ruled that those harmed by a drug don’t have to settle for suing just the manufacturer: now they can sue the inventor as well....The case involved plaintiff Elizabeth Conte, who claims to have suffered severe neurological problems after taking a generic version of the antacid drug Reglan. Conte first sued the generic drug’s manufacturer, alleging that the company was liable for the injuries caused by its product. But then she filed suit in California state court against Wyeth, the inventor of Reglan, though she had never taken Wyeth’s product. Incredibly, the appellate court ruled that Wyeth was legally liable for any adverse effects caused by the generic version of its drug. The makers of the generic product got off scot-free....In January 2009, the California Supreme Court decided not to review the decision, so it’s now Golden State law. Wyeth’s warning labels, and those of other drug inventors, will now apply not just to their own products, but also to those of other companies, which they do not control....The Conte ruling carries extremely harmful implications for drug innovation. The typical pharmaceutical company spends more than $1 billion developing a new drug and bringing it to market through a complicated approval process. Given current patent law, the company has just a few years to recoup its investment before generic drugmakers can enter the marketplace and churn out copies sold at a fraction of the original’s price. Making drug inventors responsible for problems with generics makes drug development that much more expensive—so much so that many companies will likely no longer be able to afford it. They’ll pull out of the market, and pharmaceutical innovation will decline. Conte also guarantees that pharmaceutical-company resources that would have been used for R&D will now be spent on legal defense.

In the long-run, the societal costs of these decisions will be staggering. Innovation will be stifled.
Drugs that could be developed that will save and/or improve people's lives will never leave the lab. It truly amazes me that the courts can arrive at these type of conclusions and that these types of decisions can actually be rendered.

Pharma Business Model Blues

Rick Edmonds has an interesting post here entitled -Newspapers, GM and Big Pharma: Sharing the Business Model Blues.
Edmonds writes:

Pharma seems to be where newspapers were a decade ago, even five years ago -- loaded with cash, still highly profitable, but experiencing marked reduction in revenue growth. Cracks have appeared in the pipeline of developing new medicines and selling them for years as high-priced, proprietary brands.

He does not dispense any specific detailed solutions to the problems that beset Big Pharma....but the post is still an interesting read.

New Senate Bill Takes Shortcuts on Path to Biosimilars

Senators Charles Schumer, Sherrod Brown, Susan Collins and Mel Martinez have introduced a bill regarding the approval process for the approval of Biosimilars.

However, according to Biotechnology Industry Organization President Jim Greenwood, the bill proposed by Senators Schumer et. al. is essentially a recipe for disaster.

According to Greenwood:

“While well-intentioned, the bill introduced today by Senators Schumer, Brown, Collins and Martinez follows its companion bill in the House (H.R. 1427, The Promoting Innovation and Access to Life-Saving Medicine Act) through the looking glass to a world of biosimilars that would jeopardize patient safety and undermine future medical breakthroughs.

“The legislation short cuts scientific requirements needed to ensure patient safety and creates an imbalanced system that could chill investment in research focused on discovering new treatments and cures for devastating diseases, such as cancer, Alzheimer’s, Parkinson’s and multiple sclerosis.

“As the U.S. Food and Drug Administration (FDA) has noted, biotech drugs are so molecularly complex that they are almost impossible to replicate accurately with existing science. Even minor differences in the purity of a biotech drug can change its efficacy and safety. With this in mind, any biosimilars legislation should mandate that FDA approval of a biosimilar include clinical trial data demonstrating its safety, purity and potency. Yet this bill includes language that would discourage the FDA from conducting certain clinical trials.

“More, the bill unfairly tilts the playing field toward biosimilars manufacturers. This legislation provides for less data exclusivity than traditional pharmaceutical drugs currently receive under the Hatch-Waxman regime even though every credible study on this issue has found that biologics will need greater data exclusivity than traditional drugs to ensure future medical breakthroughs. Additionally, innovators would be required under the bill introduced today to share detailed information about every applicable patent to biosimilar manufacturers, making it easier for the biosimilar company to bypass valid patents. Innovators, on the other hand, would have no ability to receive relevant information from the biosimilar manufacturer about the molecules, ingredients, and processes they use to create the biosimilar.

“A successful pathway to biosimilars must strike the right balance in ensuring patient safety and providing fair, responsible incentives for continued biotech research into cures for diseases such as cancer, multiple sclerosis, Alzheimer’s and HIV/AIDS and unmet medical needs. The bill introduced today fails to meet this reasonable metric.

“We urge Congress to ensure that any pathway for approving biosimilars is grounded in sound science, safeguards patient safety, and preserves incentives to develop future breakthrough therapies and cures.”

This topic is sure to be hotly debated over the coming months.....Stay tuned.

The Struggle for Baby Biotechs

Sally Church has a great post on her blog about the coming cash crunch for baby Biotechs.
You can read it here.
Actually you should visit Sally's blog often. Her posts are consistently top-notch.

Contradictory Supreme Court Decision and the Costs to Society

According to an article in the New York Times here - today's Supreme Court decision sets the following scenario:

An injured consumer can sue a drug maker — but not a medical device maker?

That seemed to be the contradictory result of a decision Wednesday by the Supreme Court, ruling that federal law does not protect drug companies from product liability suits in state courts.

In contrast, the Supreme Court ruled last year that federal law does bar such lawsuits against the makers of heart stents, artificial joints and other critical medical devices.

While legal eagles will debate the nuances of today's decision - here is the real issue:

"[Today's]....decision would make companies more reluctant to produce beneficial drugs that come with higher risks."

Everything you ingest, whether it is Steak, Peanut Butter, Aspirin, and even Water, carries with it an element of risk. you cannot eliminate risk.
As a society, the cost of not developing life saving but potentially risky drugs, is a cost that we cannot afford to bear.

Genentech: Worth More Than Pfizer?

I am going to have to file this post under the Category of things I never thought I would be writing - but according to an blog post on the Forbes website last Friday - Genentech is worth more [in terms of Market Cap] than Pfizer.

Matthew Herper writes here that:

"Check this out: This morning, Genentech's market capitalization of $91 billion exceeds that of much-bigger Pfizer ($84 billion.) Pfizer has annual sales of $48 billion, compared to $13 billion for Genentech....Over the past two years, Genentech shares have been basically flat, but Pfizer's stock has plunged more than 40%."

Who would of thought this was possible?

Publish Post

Pfizer wants to become more like J&J - easier said than done

Jacob Goldstein posts at the Wall Street Journal Health blog that Pfizer's Jeff Kindler is quoted by Bloomberg as saying that:

“We are breaking the company down into smaller units so we aren’t dependent on any single product. I am a great admirer of J&J and Abbott’s business model.”

While Kindler expresses admiration for J&J and Abbott, the article goes on to stress that Pfizer is a long way from replicating the business models of those two companies.

Goldstein goes on to write:

If you were about to lose a $12 billion-a-year blockbuster, you too would be eager to be less dependent on any single product. J&J is indeed a famously decentralized company, and Kindler last year said he would reorganize Pfizer into smaller business units.

What’s more, the Wyeth acquisition will help Pfizer diversify into businesses such as animal health, consumer products and vaccines.

But the buy will hardly turn Pfizer into another J&J. Pfizer will likely pull in less revenue from Wyeth’s consumer health division (which includes brands such as ChapStick and Advil) than it drew from its old consumer health business, which it sold in 2006 to J&J.

What’s more, Pfizer still won’t be a player in the medical device business, which has been central to Abbott’s growth and a key piece of J&J’s revenues.

Way back in the ’90s, Pfizer had its own medical devices unit. But the prescription drug business was booming at the time, so the company sold off its medical device business.

The question now is - Does Pfizer intend to go out an acquire a Medical Device company in a bid to remake their company?

Thomas Friedman - Invest in Biotech, Nanotech and Clean Tech

Thomas Friedman has a great piece in yesterday's NY Times. In a nutshell, Friedman thinks we should not be bailing out the economy's losers. Friedman writes:

"Our motto should be, 'Start-ups, not bailouts: nurture the next Google, don’t nurse the old G.M.’s.'"

Friedman elaborates his point when he writes:

"Yes, we have to shore up the banking system, which underpins everything; and finding a fair way to prevent hardworking people, who played by the rules, from losing their homes to foreclosure is both right and essential for stability. But beyond that, let’s think, talk and plan in more aspirational ways. We’re down, but we’re not out. As we invest taxpayer money, let’s do it with an eye to starting a new generation of biotech, info-tech, nanotech and clean-tech companies, with real innovators, real 21st-century jobs and potentially real profits for taxpayers."

Phenomenal stuff...and as usual Friedman is spot on in his assessment of what we need to do as we move forward to the Next Economy.

Career Adventure Blog

I just discovered a great blog by Kristi Daeda called Career Adventure.
Kristi is an HR professional and a Career Coach who I met on Twitter.
The posts on her blog are excellent and full of specific and tangible information that will be of help to any job seeker. Go over to her site and take a look....you will definitely learn something.

Job Hunting is all about Networking

David Rosman writing in the Columbia Business Times has a great article about Job Hunting.
You can read the article here.
Rosman's main premise is that Networking is what is going to help the majority of people find jobs. He also talks about JobAngels, which is "a 'grassroots' non-profit organization whose mission is to connect talented career professionals with those searching for work."
The work of the people involved with JobAngels further underscores the importance of networking.
Rosman closes the article with some solid advice:
There are four “Rosman Maxims” concerning the planning and execution of a career hunt. First, your future employer only cares how you can make them money, save them money or save them time. What you want is not even on the radar.
Second, a résumé will never get you the interview. But a well written, documented and professional résumé will reduce the likelihood of being first on the rejection pile.
Third, “It you tell enough people what you want, you will eventually get it.” Network, network, network. The idea that the majority of jobs are never advertised may or may not be true. However, with many companies now looking for qualified professionals, the more people in the field who know you are available, the higher the likely hood you will hear about the opening.
Fourth, “SW/SW/SW/N.” This goes along with the “If at first you don’t succeed” idea. You are going to get rejection letters; that is a fact of life. Yet another fact, many potential employers may never get back to you. These are not personal rejections. Just put a smile on your face and remember, “Some will. Some won’t. So what. Next!”

Get a copy of The Innovator's Prescription

I am in the middle of a phenomenal book entitled The Innovator's Prescription by Clayton Christensen. The book provides a comprehensive blueprint for repairing our health care system.
I will discuss the book in more detail in later posts. But if you are involved in any way in the Pharmaceutical Industry...drop everything and get yourself a copy of this book. It is not an easy read. It will make you think. But it is absolutely brilliant!

Who is Sanofi-Aventis gonna buy?

Reuters reports that Sanofi-Aventis is in the market to make an acquisition.
The article states that:

Sanofi has been mentioned as a possible buyer of Dutch vaccines maker Crucell (CRCL.AS), which has a market value of about 1 billion euros, and there has also been speculation it could make a play for its U.S. partner Bristol-Myers Squibb (BMY.N), which has a market value of around $45 billion.

My gut feeling is BMS is not a target. BMS is too big. Various other news outlets speculate while Sanofi is willing to open up it's purse strings....their targets are more likely to be small and mid-level companies. And the word on the street is that Sanofi is content to leave the big mega-mergers to Pfizer.

P&G to exit the Pharma Industry

The Financial Times is reporting that P&G may be looking to exit the Pharma industry.
The article states that:

Mr Lafley [P&G's CEO] said that when P&G had been investing heavily in pharmaceuticals in the 1990s, the returns had been well above those from consumer products. “Today, pharma companies trade at multiples at or below consumer products,” he said.

He also drew attention to greater regulatory obstacles within the pharmaceuticals industry, and increased competition from generics that reduces the pay-off of companies’ research and development.

Mr Lafley said that in weighing potential divestitures, its primary focus in making decisions would be “creating maximum value for P&G shareholders”.

This is probably a wise move for P&G. The company never seemed fully committed to the Pharma industry. People in P&G's Pharma division have always told me that they felt that the Company's primary focus was on the Consumer Goods side of the business. P&G is a wonderful Consumer Prouducts company....but developing Pharmaceuticals is a whole lot different than making Shampoos.

Merck to go shopping?

It looks like Pfizer is not the only Pharma Company with it's checkbook out.
The Wall Street Journal quotes Merck's Chief Executive Richard Clark as saying that "Merck would look 'across the whole spectrum' of deals, including a major takeover. 'I don't think in today's world any CEO can categorically rule out any type of transaction,' "

Traditionally Merck has been proud of its internal R&D programs.
But now apparently Merck wants to go shopping too.

Pfizer / Wyeth - The Opportunity Costs for R&D

Derek Lowe has a great post over at SeekingAlpha.com about the drag on productivity that this merger is having on both Companies' R&D Departments. Derek writes:

I’d imagine that things have slowed down a great deal. No one knows what the future will be like, what parts of the company will stay, and which people will be asked to stay with them. How do you make plans under those conditions? For many people, the project they’re working on is now very much a secondary consideration.

Even outside the personal level, there are a lot of paralyzing influences. The same uncertainties about individual jobs apply to development projects. Some of what Wyeth is working on surely overlaps with what Pfizer’s already doing. So which project goes forward? Not both of a matched set, that’s for sure. There are some projects at both companies that are dead in the water, but no one can be sure which ones, and no one will know for some time to come....all this has a ferocious price, when you measure it in opportunity costs. The people caught up in all this could be doing something much more productive with their time, for sure. This sort of thing doesn’t show up on the books. And the longer the process drags on, the worse it’ll be.

Derek is correct....not every cost will show up 'on the books'. And this merger could ultimately prove to be extremely expensive for Pfizer....both in terms of Real Costs and Opportunity Costs.

Pfizer - Wyeth - Bane for Small Biotechs???

The NY Times has an article today entitled "Wyeth Deal May Slow Pfizer Biotech Acquisitions".
The article states,

"Pfizer’s deal to buy a big pharmaceuticals rival, Wyeth, raises questions about how willing — or able — Pfizer will be to enter deals anytime soon with biotechnology companies, many of which are struggling to stay in business."

And, in the article, Oleg Nodelman, portfolio manager at the Biotechnology Value Fund is quoted as saying,

“There are probably 5,000 biotech companies out there that are waiting for a deal to save them."

However, Mr. Nodelman is not totally pessimistic regarding the future of the smaller biotechs.
The article closes by saying that fortunately -

"Big pharmaceutical companies are not the only ones who can buy companies or drugs. In some cases, mid-size biotech companies like Cephalon and Myriad Genetics are outracing larger companies to snap up some drugs.

That is why Mr. Nodelman, at the Biotechnology Value Fund, said he did not expect the Pfizer-Wyeth deal to have much of a braking effect on acquisitions of small companies or their drugs. “All it means is there is one less company that might do a deal with them.”

Geron's Embryonic Stem Cell Trial - Not exactly what the Media is touting

The FDA just approved the first human trial embryonic stem cell derived based treatment.
Geron Corp. has announced that the FDA approved its application to begin trials for an embryonic stem cell -derived treatment for spinal cord injuries.

The media is playing up this development as evidence of a 'Brave New World' with regards to Stem Cell research....that we are at the cusp of new research using Embryonic Stem Cells, and that the new Obama administration is shepherding in this new era in Research.
Forbes.com wrote:

The change has already begun. Just two days after his inauguration, President Barack Obama is set to clear the way for the first human testing of embryonic stem cells on people with spinal injuries, and biopharmaceutical firms like Geron are set to benefit.

Yet the facts say otherwise.

According to an L.A. Times article, even Dr. Thomas Okarma, Geron's CEO,...'the timing of the FDA's decision -- made late Wednesday but announced Friday by the company -- had nothing to do with the change of administrations in Washington....."We have no evidence that there was any political shadow over this process." '

Even more important according to Dr. David van Gend, National Director of Australians for Ethical Stem Cell Research, is the fact that Embryonic Stem Cells (ESC's) are not:

"....being given to patients at last. They are not. They never have been and never can be put into humans, because embryonic stem cells form tumors in animals. Only adult stem cells can be put into humans – and have been used now successfully in thousands of patients.”

Further reading shows that what Geron is actually doing is testing to see if their "hESC-derived oligodendrocyte progenitor cells that have demonstrated remyelinating and nerve growth stimulating properties leading to restoration of function in animal models of acute spinal cord injury", actually works in humans.
Again the distinction is important.....they are not injecting actual ESC's into people....the cells are actually derived from ESC's.

So while the research Geron is conducting is absolutely exciting and promising.....it is not exactly what the Media is touting....

Pfizer and Wyeth - Misery loves company?????

Eben Tessari writes "5 Reasons Pfizer Shouldn't Buy Wyeth" over at SeekingAlpha.com.
You can read his complete post here.

And what is Eben's only justification for the proposed merger? - "Misery loves company."
Not exactly a stellar reason to consummate a $60 Billion merger.

Pfizer - Wyeth Merger - Is it a bad idea?

With all the talk about the proposed merger between Pfizer and Wyeth....I took the time to re-read an article from Fortune Magazine that I had saved on my computer. It was written in August 2007. You can read the article here.
Although some of the details and facts discussed in the article are dated [the article is 18 months old].....I wonder how many of you would agree with the author's conclusions. John Simons' closed his article by writing:

Pfizer could have an investor revolt on its hands if it does decide to propose a Wyeth acquisition. In recent years, top management has sworn off its appetite for big deals, promising a new focus on targeted acquisitions and alliances with smaller (read: more innovative) drugmakers and biotechs. Last winter, incoming CEO Jeff Kindler promised Pfizer would radically change the way it does business. That departure from the old way included a round of difficult cost cutting and "right-sizing" at the company. So, Pfizer needs to continue it's austerity campaign, and "oh yeah", in the meantime, conjure up some novel medicines.

The question is.....is John's assessment still correct in 2009....or is it time for Pfizer to do a deal?
Will this deal make Pfizer's problems go away?
What are your thoughts?...............

Merck goes hunting - Other deals pending???

Merck has made good on its promise to make deal making a priority in 2009.
Last Friday, just 9 days into the New Year, Merck announced that the company had signed a diabetes and obesity drug deal with Galapagos worth up to $233 million. You can read the specifics about the deal here.

And with Pfizer's Jeff Kindler telling the press that Pfizer is willing to do a deal with a big rival....Who knows....2009 may be a very active year on the M&A front.

Missing Pharmalot

Ed Silverman who runs the blog Pharmalot just posted a surprising announcement today.
He is shutting down Pharmalot. You can read his post here.

I thoroughly enjoyed reading Pharmalot daily and I learned a tremendous amount from Ed.
Ed is a tremendous writer and has a Herculean work ethic. As he jokes he lives tethered to his laptop.

Ed....we are going to miss you in the blogosphere. Best of luck!!!

Stress Can Help Kill Cancer Cells

Interesting article out of The Brookings Register in South Dakota.
Researchers at South Dakota State University "...are investigating whether "stressing" cancer cells can make cancer radiation treatment and chemotherapy more effective. "

According to the article...

"Professor Xiangming Guan of SDSU's Department of Pharmaceutical Sciences explained that when cancer cells are tired out, they are easier to kill using free radicals, the basic mechanism behind radiation and some chemotherapy drugs."

Guan goes on to explain....

"We have also demonstrated that the stressed cancer was more sensitive to radiation treatment in several different human cancer cells such as ovarian cancer, lung cancer, breast cancer, and skin cancer ."

Interesting idea....and it makes intuitive sense. We all know that a stressed organism is more susceptible to illness. It only makes sense that this principle would apply at the cellular level. Except in this case scientists would be applying this principle to make 'stressed' cancer cells 'sick'.

Additional Information on Peyronie's Disease

Just a follow-up to my last post......
I have had the good fortune to have been communicating with Stan Hardin who is the head of The
Association of Peyronie's Disease Advocates. Stan reached out to me after I had written a post that was questioning Pfizer's decision to partner with Auxilium to develop a drug for Peyronie's Disease.

Stan took the time to provide additional information about not only the physical aspects of the disease, but he addressed the serious emotional issues that men afflicted with this disease have to deal with. Additionally Stan pointed out that up to 9% of men are afflicted with the disease.
You can read more about both Peyronie's Disease and Stan's organization at their website here.
The site is extremely well done and informative.

And best of luck to both Pfizer and Auxilium in their quest for a cure.

Update re: Pfizer and Peyronie's Disease

Well...I stand corrected.
In my last post I discussed Pfizer and Auxilium's drug development agreement for a drug to target Peyronie's Disease.
And in my post, I was somewhat critical of Pfizer's decision.
However, a reader was able to provide me with additional information re: Peyronie's Disease. It turns out that that the number of men suffering from Peyronie's Disease is not 1-4%, The percentage of men afflicted by the diesease is 9%.
You can see a brief article about the disease here.
But, equally as important, the reader's discussed some of the emotional issues that men suffering from this disease face. He made me realize how devasting this disease can be to men who are afflicted by it.

Bottom line.....
Pfizer and Auxilium are working to find a cure for a disease that, if they are successful, will not be a blockbuster. To use a baseball analogy, it will probably be a 'single', not a 'home run'. Nevertheless this drug will improve the lives and health of a significant percentage of people. And, when it comes down to it, improving the lives and health of people is the real purpose of the Pharmaceutical Industry.

How Will Pfizer Spend Their Cash?

Mike Huckman of CNBC reported earlier this week here that Pfizer's streak raising dividends ended after 40 years. What does this signify for Pfizer?

Huckman reports that Miller Tabak, healthcare analyst Les Funtleyder, feels that -
"The dividend is still above seven percent which makes the company seem almost distressed." Yet, the cash hoard could turn out to be a major advantage. Funtleyder continues by writing..."longer the cost of capital stays high, the more cash on a balance sheet becomes a competitive advantage. Should we be in for a prolonged lull in the capital raising cycle, PFE may be able to buy its way out of some of its pipeline deficiency."

So say Pfizer is looking to 'buy its way out of some of its pipeline deficiency'. That could be a viable strategy. So what type of deals would they look to strike? What type of cutting edge drugs would they deem worthy to invest in? How would Pfizer strategically spend their cash?

Late this week we got an answer. Pfizer signed a drug development partnership with Auxilium Pharmaceuticals and is paying $75 million up and and up to $410 million over time if additional milestones are met. But as Huckman writes....this is not your "typical" drug partnership -

"So what makes this so unusual? Well, it's the drug AUXL is developing. It's a two-in-one for a rare disease that causes fingers to curl toward the palm and--and, no, I'm not making this up and it's not a joke--for penises that curve. The "problem" is called Peyronie's disease and it reportedly affects one to four percent of men. I'd never heard of Peyronie's until I read the press release."

I don't know about you...but if I still owned Pfizer stock...I think I would rather that they just gave me the dividend.

Big Pharma not a Threat to Biotech yet

Interesting article here at The Street.com.
As Adam Feuerstein writes:

A whole host of things have to go right before drugmakers like Merck(MRK Quote - Cramer on MRK - Stock Picks) or Novartis(NVS Quote - Cramer on NVS - Stock Picks) can compete in the biotech arena.

So the Biotech industry has no reason to fear Big Pharma....at least not just yet.

Merck and Generic Biotech Drugs

Merck has announced that it is creating a new division to sell Generic Biotech drugs.
Generic Biotech Drugs are appealing to Big Pharma because the cost to develop and manufacture these types of products are projected to be significantly less than developing a new Drug Compound. However, the revenue from Biotech Generics will be significantly higher than from traditional small molecule Generics. The math is simple...Lower Cost + Higher Revenue = More Profits.
And Merck may have a leg up on their competition in the Biotech Generics arena.
According to the article in Forbes:

"Merck has a killer app when it comes to making copycat proteins (see "Needle Work"). In 2006 it dropped $400 million on privately held GlycoFi to get its hands on a technology that can produce biotech drugs cheaply in yeast, instead of in complex and finicky mammalian cells. Merck wanted the tools for its own drug development. But one of GlycoFi's proofs of concept was a scientific paper showing its method could be used to create a copy of Amgen's Epogen. The paper was published in Science in September 2006. Merck will file a copycat Epogen with the U.S. Food and Drug Administration in 2012."

Seth Godin on Recruiting

I was poking around the 'Net this morning and came across a fantastic post by Seth Godin.
Seth is a best selling author/entrepreneur who focuses primarily on the subject of Marketing.
In this post, Seth discusses the importance of Talent to an organization, and then wonders why most companies do such a poor job recruiting the type of superior talent they need.
Seth writes:

"Most hiring managers don't understand organizations that go to extraordinary lengths to find and retain amazing people."

Unfortunately, Seth continues:

"Most hiring, especially in a down market, is handled as a mostly bureaucratic task. Find people who fit in, do a rudimentary background check to eliminate problems, try not to break any hiring laws..."

And Seth closes his post by asking:

"If talent is so important that you are betting the company on it, why aren't you actually investing in finding and retaining that talent?"

So we all need to ask ourselves....What are we doing, both as companies and as Recruiters, to ensure that we are hiring and retaining the best talent on the market?

Another article about the trouble at the FDA

Today's Washington Post has an article that discusses the issues facing the FDA....and the article does not paint a pretty picture. William Hubbard, a long time former employee at the agency is quoted as saying:

"FDA is close to being at a tipping point -- the agency is hanging on by its fingertips in protecting us,"....If something is not done, they could become a failed institution, and no one wants that. The FDA is not only important to protecting the public health but also to the industries it regulates."

David Ross, another former FDA employee says:

"I'm afraid we're going to see more horrible things happen if we don't get our act together on this."

The problems are not just related to Pharma though according to Christopher Waldrop of the Consumer Federation of America.

"Food safety tends to get short shrift...The drug side tends to get much more attention than the food side. Food is equally important and needs to get the attention it deserves."

Some of the problems the article cites are woefully inadequate and antiquated computer systems
and a lack of resources and people with which to execute much needed inspections....especially overseas.

Today's article in the Washington Post couple with the recent New York Times Magazine article [discussed in an earlier post] present us with a frightening commentary with regards to the state of the FDA. Unfortunately the problems won't be solved overnight. But there is no question that the problems at the Agency need to be addressed quickly and aggressively....for all of our health and safety.

Obama and Big Pharma

Well....it looks like Barack Obama is going to be the next President of the United States.
Now the question is how will his victory affect the Pharma industry?
Here is an article from the Wall Street Journal from two weeks ago that laid out how an Obama or a McCain victory would impact the industry. According to the article, Big Pharma could be the biggest loser no matter who won the race.

The Safety Gap

Today's N.Y. Times Magazine contains a frightening article about the about the challenges facing the FDA. The short version is the FDA is under-equipped, under-staffed, and under-capitalized to deal with the challenges of a Global economy. For example, the FDA's limited resources prevent it from adequately policing the very manufacturing sites where there are most likely to be problems. And even if inspectors do successfully audit a site, they rarely if ever are able to go back to follow-up. The article states:

"And when inspectors find dangerous conditions at domestic plants, they generally return promptly to ensure that those conditions get fixed. Not so in foreign plants. In a report released Oct. 22, government auditors reported that between 2002 and 2007, F.D.A. inspectors found dangerous conditions in 15 foreign plants. Only one of those plants was reinspected within two years, the auditors found. In every other case, the agency took foreign managers at their word that promised changes were made."

The article goes on to cite numerous examples that illustrate the issues and problems that the agency faces.

Bottom line...the Food and Drug Safety system in this country is broken and it desperately needs to be fixed.

Cash Poor Biotech Firms

Interesting article in the Wall Street Journal about the impact that the global crisis in liquidity will have on small biotech firms. According to the article:

"In the U.S., 38% of 370 small biotech companies are operating with less than a year's worth of cash, and nearly 100 publicly traded biotech companies have less than six months' cash..."

Unless these companies find capital....the majority of them will cease to exist.

Bottom line: For the sake not only of the Pharma/Biotech industries, but for the sake of the economy in general, we have to find a way to increase the flow of capital. Without access to capital,
good ideas are never developed and good companies cease to exist.

Here come the M&A's

The Philadelphia Inquirer has an interesting article about what they anticipate will be a deluge of deals in the Pharma sector. According to the article the question is not if, but when will we see these deals happen.

China Rising - the outsourcing trend

According to Ed Silverman here, China is becoming the leading outsourcing location for Pharma companies.
[It is ranked as the #1 location in Asia according to a report by PriceWaterhouseCooper.]
The most frightening trend for U.S. based R&D operations is that China is becoming "...a rival as a leading source of drug discovery and innovation."
According to one pharmaceutical industry executive interviewed for the report, “Within five to ten years, we will be moving from ‘made in China’ to ‘discovered in China’”

Victor Frankl and how to not be depressed about the state of the Pharma industry

Especially within the last week, it is hard to surf the 'Net or turn on the T.V. and not be inundated with bad news about the economy or the state of the Pharma industry. With all of the negative news out there, it is easy to become overwhelmed. All of us collectively feel that we are the victims of circumstances and events beyond our control.

And the truth of the matter is that we have no control over these events. We have no control over the economy. We have no control over whether or not Congress will approve the bailout. We have no control over whether or not our companies will lay us off. The list of things that we have no control over is infinite.

So what are our options? Do we simply curl up in a fetal position and give up?

Actually there is another option....and this advice comes from Victor Frankl.
Victor Frankl was an Austrian Psychiatrist and survivor of the Nazi concentration camps. He wrote a book about both his experiences in the camps and the philosophy and the mind-set that he developed while imprisoned in them. In that book, "Man's Search for Meaning" Frankl summarized his philosophy when he wrote,

"Everything can be taken from a man or a woman but one thing: the last of human freedoms to choose one's attitude in any given set of circumstances, to choose one's own way."

So when times get tough....and they probably will -
When the economy falters....and it will probably continue to do so -
We have to realize that while we can't control what is going on externally in the world, we can control our attitude toward these events.
So instead of worrying and being depressed about a pending lay-off....which we can't control anyway....we can instead update our resumes and work to improve our interviewing skills.
And instead of curling up on the couch depressed about our company's 3rd quarter earnings, we can instead get up and attend an industry related networking event and try to develop contacts that will enable us to move to a better company.
Bottom line...
Our attitudes and our actions are the only things that we actually can control.

GSK to cut 850 R&D jobs

According to Reuters GSK is set to slash 850 jobs in R&D in both the UK and the US.
You can view the article here.

As John Murphy, analyst at Goldman Sachs notes, "R&D is no longer the sacred cow it was in the past."

Credit Crunch to affect Pharma M&A activity

The Financial Times asks an interesting question in this article today....Will the credit crunch affect M&A activity? The article discusses the possible implications of the credit crunch on Roche's bid for Genentech. While they were not mentioned specifically in the article, two other pending deals that obviously are subject to the same financial issues as the Roche/Genentech deal, are King Pharmaceuticals' bid to acquire Alpharma and the "Mystery Suitor" trying to acquire Imclone.
Time will tell if the lack of liquidity in the markets is the death knell for these deals.

Does a Pfizer Breakup Make Sense?

Peter Benesh of Investor's Business Daily asks here if Pfizer would not be better off if it broke up the company. Peter writes,
"One idea, whispered more than hollered, is to break up Pfizer and sell it in pieces to unlock shareholder value."
Les Funtleyder, an analyst at Miller Tabak agrees with the premise that a breakup may also be better for shareholders:
"Investors wonder if the share price reflects the value of the assets and the business and, if not, will a breakup unlock that value?"

Others quoted in the article ask if Pfizer's size and its culture stifle innovation and if a "smaller and nimbler" Pfizer wouldn't be more successful.

I am not sure exactly what is the best route for Pfizer to take in order to address its problems.
But there is one thing I am sure of....The problems that Pfizer faces are not unique to Pfizer.
Every other big Pharma company is wrestling with the same issues and problems.
Bottom line: The Big Pharma business model is outdated and ineffective in today's environment.

Major Pfizer layoffs on the way

According to contacts of mine....there are some major layoffs in the works at Pfizer.
As one on my contacts said in an email, the problems at Pfizer are worse than they expected.
It really looks like it will be bad.
And Big Pharma's woes continue.....

Troubles for Merck

FiercePharma reports that an influential analyst for the pharma sector has just downgraded Merck shares. See the post here. Tim Anderson of Sanford Bernstein recently cited a number of reasons for his negative stance with regards to Merck ranging from the problems with Singulair and Gardasil to problems with Merck's pipeline.

It sure is tough being a Big Pharma firm these days.....

Outsourcing the Drug Industry

Interesting article in the most recent BusinessWeek magazine entitled Outsourcing the Drug Industry. The article details the efforts of Big Pharma companies to develop drug discovery partnerships with companies in China and India. According to the article,

"What the multinationals now seek from India is the same combination of brainpower and cost savings that made the subcontinent a leader in software and computer services....[And] the impact of research outsourcing will be amplified greatly as China, with an even bigger pool of biochemists, expands its role."

But the article does note that,

"The rush east, where five PhD chemists can be had for the cost of one in the West, entails risks."

More Hostile Takeovers in Pharma?

Anne Law asked an interesting question in her blog, "Will hostile takeovers become the norm for drugmakers? You can read her blog here.
The truth is.....It looks like there will be a continued shake-out in the industry. The Pharmaceutical industry is in the midst of a very dynamic period as the established players in Big Pharma look for ways to generate revenues now that the traditional "Blockbuster" model no longer works. The industry is starting to feel the competitive pressures that other industries have been dealing with for decades.
But the fact remains the Pharma industry is still remains one of the strongest industries out there.
And when I complain about the state of the Pharma industry to friends of mine who recruit for other industries, they laugh and tell me they would gladly swap their Recruiting Firm for mine. They say that while the Pharma industry is hitting some bumps in the road, the problems Pharma is facing pale in comparison to the problems plaguing other industries.
More on this topic later.....

Preparing for Layoffs

Joann Lublin over at the Wall Street Journal had a great article earlier this week about how to handle rumors of an impending lay-off. The short version of the article is this: Be Prepared.
Great article...and timely advice.

Roch's move was really a surprise

A couple of days ago, I posted about how the people at Genentech were blindsided by Roche's announcement of their intent to acquire the remainder of the outstanding shares of Genentech that Roche did not own.
And I guess it really was a surprise.
Further underscoring how unexpected the move by Roche was....Reuters reported that Arthur Levison, Genentech's CEO, sold 90,000 shares last Friday. If he had held on to those shares even one more day, he would have made substantially more profit...upwards of $1 Million Dollars.

Big Pharma Earnings - BMS to cut $1 Billion more

Tracy Staton at Fierce Biotech writes about the earnings reports that Big Pharma has announced over the last few days. The article is here.
While the news for the companies listed was generally upbeat....buried in the announcements are interesting tidbits such as the fact that Bristol-Myers Squibb is planning to cut another $1 Billion dollars...although the company did not provide any specifics.

These announcements further underscore the trend we have been seeing over the last few years.
Long Term Growth at the Big Pharma firms is a thing of the past. Big Pharma is at a loss to find products that can generate the revenue they need to support and grow their organizations. Big Pharma will not disappear. But going forward...if you are looking for stability and career growth...you are better off at a small or mid-size firms.

I expand on this discussion in a later post.

Roche Bids For Genentech

Roche announced a bid to take over the remaining shares of Genentech that it does not already own. Roche's Chairman of the Board, Franz Humer explains the rationale for the move:

"Our long and successful participation in Genentech has provided great benefits to both of our companies and shareholders. It has resulted in one of the biggest success stories in the healthcare industry. Roche's significant investment in Genentech over many years has helped it to focus on innovation and long-term projects, leading to some of the most important breakthroughs in the treatment of cancer and other life-threatening diseases.

The transaction will create a unique opportunity to evolve Roche's hub-and-spoke model into a structure that allows us to strengthen the focus on innovation and accelerate the search for new solutions for unmet medical needs. Combining the strengths of Roche and Genentech will create significant value and result in benefits for patients, employees and shareholders."

Unfortunately, according to reports, the move by Roche totally blindsided the people at Genentech. I guess the "unique opportunity" and "significant value"that Humer describes above wasn't so obvious to the people at Genentech.

Teva still better than Sandoz?

Back on June 5th, I posted about Daniel Vasella, CEO of Novartis, being quoted as saying,

“Teva is better than we are, and that’s hard to take."

I would love to hear his take on the recent announcement of Teva's acquisition of Barr.
What is he saying now?

Teva to acquire Barr

The world's biggest Generic Pharmaceutical company just got bigger.
You can read about it here.
And the industry consolidation continues. The question remains...Is a bigger company always better? Only time will tell.

Pfizer layoffs

Derek Lowe writes in his blog, In The Pipeline, that there are rumors that Pfizer in Groton is slated for layoffs. You can read his post here.
One significant difference about this projected layoff is that:

"...this is going to hit both PhD and associate chemists, as opposed to some earlier reorganizations there which mostly seemed to let lab heads go."

Derek goes on to write about Pfizer:

"It’s going to be a tough place to work, and it’s going to be a tough stock to own. If you have a chance to do anything about either of those situations, I’d look into it."

Big Pharma is sure turning out to be a tough place to be. Fortunately there are a number of smaller and mid-size companies that are growing and that are actually turning out to be great places to work. I will discuss why this trend is occurring in the Pharma industry in a future post.

Alzheimer's Drug problems

According to Ed Silverman in his Pharmalot blog, Myriad Genetics is discontinuing development of Flurizan, their Alzheimer's drug. But there is a bigger issue at stake here than just the failure of one drug. As Ed writes in his blog:

The failure is significant because Flurizan was one of the first drugs to reach late-stage testing that tried to prevent the buildup of amyloid plaque in the brain, a focus of much research into Alzheimer’s. Whether this will raise questions about other drugs targeting amyloid plaque remains to be seen.

Wyeth and Elan are jointly developing a drug that tries to block amyloid plaque and, so far, have generated considerable interest, even though preliminary Phase II results were mixed. Lilly is also in late-stage testing of a drug that works simlarly to Flurizan

Bottom line....are all these companies chasing after the wrong cure for Alzheimer's?

Pharma and the UK

According to an article in Thursday's Financial Times
Leading pharmaceutical groups are cutting back on clinical research in the UK, claiming insufficient commitment by the government and the National Health Service to support new drug development.

Pfizer of the US, Roche of Switzerland and Merck-Serono of Germany are among the companies which have told the Financial Times they have, or will, reduce the number of British patients enrolled in trials to test experimental medicines for life-threatening diseases such as cancer.

The article goes on the quote Harpal Kumar, who is the head of Cancer Research UK, who said:

“In the long-term there is a serious risk that if we get to the point where none of the new drugs are being used in the UK, the trials won’t be done here.”

There are many issues that can be addressed concerning the ongoing debate between the Government in the UK and the Pharma industry over the issues of costs. But the overriding issue here is that people in the UK will ultimately be denied access to new innovative drug treatments. Innovative treatments that save lives will be available in the future, but for people in the UK, they will not have the option of using them. That is a crime.

Novartis CEO - "Teva is better than we are."

File this quote under the category of 'Things you don't hear every day".
In a recent interview, Novartis CEO Dan Vasella said:

“Teva is better than we are, and that’s hard to take."

But Vasella did add:

“It is good to look at how we could be better.”

How often do you hear a CEO so openly praising the competition?
How often do you hear a CEO so openly criticizing his own organization?

War for Talent impacts the FDA

According to this article in the Hartford Courant, even the FDA is not immune to the effects of the War for Talent. Private sector Pharmaceutical companies have been poaching talent from the FDA, and it looks like there is no end in sight for the 'Brain Drain' at the Agency.

Biotech Mega Deals

Earlier in the week, Rueters reported that Ernst & Young had just released their annual Global Biotech Survey. According to the Consulting Firm:

"One or more mega acquisitions of mature biotechnology companies along the lines witnessed with MedImmune -- and nearly seen with Biogen Idec in 2007 -- is likely."

But do big deals make sense? Some experts believe smaller, more targeted, deals provide better results. And there is probably a lot more validity to the latter approach of smaller deals.
As one of my friends is fond of saying, "If you take one large empty drug pipeline and combine it with another large empty drug pipeline, you get one VERY LARGE....EMPTY PIPELINE."

Bigger isn't always better.

Happy Anniversary!!!

On a personal note...today The Harrison Group celebrates 12 years in business.
I started the firm on 5/23/96. Starting and operating The Harrison Group has been by far...with the exception of the birth of my kids....the most significant event of my life. I wouldn't trade my experience of running this company for anything. It really has been that great!!!

Good news for Pharma workers

Ed Silverman over a Pharmalot reports here that while there have been a number of layoffs in the Pharma industry, most workers are finding jobs at comparable or higher levels. In fact, Ed writes:

Of those laid off, 73 percent found new jobs at the same or higher level, and 84 percent did so without relocating.

The bottom line is this: People in the Pharmaceutical industry need to realize that while there has been a tremendous amount of change in the industry...while the newspaper seem to be full of negative press about the future of the industry...there still exists a tremendous amount of opportunity in Pharma. The Pharmaceutical Industry is still...by far...the most exciting and rewarding industry out there. People are being laid off...some companies are downsizing...but there is still a lot of hiring going on.

And I see it every day.

Hassan says Schering Plough recovery still on track

Fred Hassan told shareholders at a meeting in Memphis on Friday that he still feels that his turn-around plans for Schering-Plough are still on track. You can see the article here.
But he backs his claim up with some solid facts. Sales at Schering are up by $6.6 Billion in the last four years. And Schering-Plough now has 13 experimental drugs in the final rounds of human testing. That figure is up from 5 in 2003. The recent developments with Vytorin has obviously set Schering back somewhat...but maybe Hassan can still pull off another turn-around...Stay tuned.

Chinese Generics

According to a recent article on Reuters, there soon will be a wave of generics coming out of China.
The end result of this development will be a significant decrease in prices for generics.
The problem is this...if cost becomes the overriding concern for these companies, then quality will eventually suffer. Quality issues when they involve things like toys and consumer products are admittedly an annoyance...but rarely do those issues cause any serious damage. Unfortunately quality issues in products that we ingest can have extremely far-reaching implications.
Stay tuned for more...