Pharma’s Cutting Edge

In case you are one of the folks who subscribe to my RSS feed or just found the site and were wondering why there have been no posts since April, this note’s for you.

Here’s the truth.  I enjoy writing the occasional editorial on our industry, and I especially enjoy it when I get feedback from readers (surprisingly little in the way of comments; much more through email). I’ve been proud about the quality of many of my longer blog posts, including those critical of the industry.

Not everyone is thrilled about them, though. Several months ago I was interviewing for a senior medical position with a pharma startup that consisted solely of industry veterans (it was a second-generation spin-out). The hiring manager was nearing retirement, a grizzled veteran who is very old-school in his philosophy it turned out.

I had always put my blog on my resume, so he checked it out soon after we met. It just so happened that the first post he read was critical of some obviously phony behavior on the part of several industry spokespeople who laid blame for the death of some related drug programs on regulators rather than on their own lack of foresight. The hiring manager wasn’t at all happy, telling the recruiter that the industry has enough critics without one of its own criticizing it publicly. The recruiting process ended there for me, despite the recruiter recommending me as the top candidate of five she had set up with interviews.

I didn’t completely stop posting after that, although I slowed down a lot. I continued to look for full-time work, and when I finally made it past the first interview stage with my current employer, I stopped posting altogether, fearing that I anything I say might be held against me. I didn’t want to risk being tripped up by my own keyboard.

Now that I am a new hire I am reluctant to start posting again. It’s not like the public is clamoring for more pharma blogs–even the most widely read of them are not nearly financially self-supportive–and the type of posts I most enjoy writing are not typically bloggish. I enjoy writing expositive pieces that explore big-picture issues of strategic management value. These types of essays can be published elsewhere, including peer-reviewed journals and trade magazines. So, I’ll play it by ear, maintaining the blog for now and posting whenever I feel sufficiently moved to communicate something.

If I never post another essay, thanks for reading. I hope you find the archives helpful.

Best wishes.

Fred

June 5th, 2009 | Category: Uncategorized | Leave a comment

I last wrote about Dendreon’s Provenge active immunotherapy for prostate cancer back in May of 2007, when I raised questions about FDA’s decision not to approve the therapy, despite a favorable advisory committee opinion.

Today, I am happy to pass along news of positive top-line results from a confirmatory Phase 3 study of Provenge (IMPACT), released nearly two years following the original FDA action on Dendreon’s BLA.

I suppose some would regard this an appropriate time for a lament about a too-conservative oncology drug review division that needlessly delayed wide availability of the pioneering therapy.  It seems most appropriate to me, however, to let the news speak for itself, content in the outcome and the hope it brings to cancer patients who might now benefit from Provenge. Amidst notable past failures, perhaps at last this treatment concept has proven itself clinically. If so, consider this a momentous occassion, worthy of celebration and praise. And now, bring on the full results!

April 14th, 2009 | Category: Technology | Leave a comment

Have a look at a recent paper by an osteopath with strong anti-industry sentiment who nevertheless manages to put together a study that systematically (and mostly fairly) examines the biases evident among published reviews of rimonabant. I say “mostly fairly”, because I found the editorializing to be all over the place, an anti-industry data dump if you will, that is strongly slanted and almost paranoiac in tone. But if you liked Marcia Angell’s book, you’ll love McPartland’s editorial style.

Although McPartland necessarily injects subjective analysis into his review of bias inherent in the rimonabant review literature, he does attempt to consistently apply his judgments and uses an internally consistent instrument as his review template. I would have much preferred that McPartland recruit a small panel of reviewers, but for a solo effort, this was an okay approach. The findings speak for themselves and will unlikely surprise anyone who has worked in the industry for a while.

I will reiterate my long-standing view that it is important for those of use who live and breathe the business of developing new drug therapies to welcome and even promote external criticism and, if found to be valid, to modify our practices until they serve our customers first.

April 7th, 2009 | Category: Sales and Marketing | Leave a comment

Goodbye Wyeth, Schering-Plough, Genentech. 

The wave of Pharma acquisitiveness has arisen anew after a short period of dormancy.  It seems that every time this happens pundits, myself included, take a position on either side of the mega-merger debate  Resolved:  “Pharma mega mergers hinder pharmaceutical innovation and thus rob long-term investors of shareholder value”.  Personally, I’ve always argued in the affirmative. 

The dearth of quality academic research on the subject has perpetuated the debate.  The biggest drawback to even quality work on this subject, like that of Patricia Danzon et al, is that the time horizon in such studies has been too short (usually 1 to 3 years) to capture the effects of M&A on long-cycle R&D outcomes and long-term equity investment.   Generally speaking, though, academic studies suggest a modest negative effect of large mergers/acquisitions on R&D performance and a modest positive effect of R&D alliances.  Recently, a couple of academic studies have been published that add more substance to this debate either by following firms that merge or acquire for longer periods of time post-event or by measuring more dimensions of R&D performance, thus offering a more complete picture of merger effects. I’ll discuss them both here and see whether the debate is tilted to one side by either or both of them.

I’ll begin with a book chapter by Grabowski and Kyle published last year that contains some new, albeit preliminary, research on the effects of mergers and acquisitions on drug-therapy development phase-transitions (i.e. project level), using a database (IMS’ R&D Focus) of 4500+ firms conducting R&D between 1990 and 2007 (the observation period includes mergers between 1985 and 2006).  The researchers examined firms of all sizes, but since I’m primarily interested in large firms, I’m only going to discuss their findings for large and very large firms by their categorization; such firms have 20-50 and 50+ active R&D projects in the database per year, respectively.  I’m also only going to report their findings for transitions from Phase 2 to 3 and beyond Phase 3, since public data on earlier work tends to be unreliable.

For large and very large firms, merging firms tended to have a higher fraction of projects advance from Phase 2 to Phase 3 within a 5-year window than non-merging firms.  The fraction advancing for merging firms was roughly 24% for each size, whereas merging firms advanced ~33% of projects. With the Phase 3 to Launch transition, large non-merging firms appeared to under-perform their very large counterparts (49% vs. 57% advancing), and for both size classes, merging firms outperformed their non-merging counterpart:  For large firms 49% vs. 65% advanced (non-merger vs. merger), and for very large firms 57% vs. 64% advanced.  The probability of a project advancing to the next stage within five years was estimated by regression, controlling for firm size and year and merger was found to confer a higher probability of advancement. 

This study has some major limitations, and Prof. Kyle tells me that she is in the process of expanding this line of research, which I hope will address some them.  One of my biggest concerns is that it appears that a firm experiencing a merger at anytime during 1985-2006 is considered post-merger in the analyses, even if the project being examined transitioned in the pre-merger period, which eliminates any possibility of distinguishing cause from effect, i.e. do stronger R&D firms merge or do mergers result in stronger firms.  But, even if the analysis had been more sophisticated, the question simply cannot be answered definitively by this type of study.  Furthermore, Phase transition probabilities alone are hardly an adequate measure of R&D performance, even considering the all-important transition from Phase3 to Launch.  What would be needed is one or more measures of the importance of the innovation advanced, either in terms of its utility (i.e. societal benefit) or its commercial success (i.e. investor benefit).

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March 15th, 2009 | Category: For Investors, R&D | Leave a comment