Previous Issues

by Patti Charek, RF Walsh Collaborative Partners

RXi Pharmaceuticals and UMass Medical Announce Research Collaboration

RXi Pharmaceuticals, a biopharmaceutical company pursuing the development and commercialization of proprietary therapeutics based on RNA interference (RNAi), today announced a collaboration with Shalesh Kaushal, M.D., Ph.D., Chairman of the Department of Ophthalmology at The University of Massachusetts Medical School (UMMS). The research collaboration will be focused on the application of RXi's self-delivering RNAi (sd-rxRNA®) compounds for ocular diseases such as age-related macular degeneration, the leading cause of blindness in Americans over 55 years of age.

RXi previously presented encouraging data on spontaneous cellular uptake and potent activity of sd-rxRNA compounds in retinal cells. The collaboration with UMMS will further advance RXi's therapeutic platform by evaluating the delivery and silencing activity of sd-rxRNAs in preclinical models of ocular disease. Noah D. Beerman, President and CEO of RXi Pharmaceuticals commented, "Leveraging academic collaborations is an essential part of our business strategy and we are looking forward to collaborating with one of the top clinical research ophthalmologists in the US." Dr. Kaushal commented, "RXi's next generation sd-rxRNA compounds incorporate many drug-like properties of a successful therapeutic and may improve the clinical success of RNAi therapeutics. I am enthusiastic about the opportunity to work with such promising technology from one of the leading RNAi therapeutics companies."

RNA interference (RNAi) is a naturally occurring mechanism whereby short, double-stranded RNA molecules interfere with the expression of genes in living cells. This mechanism has the potential to be harnessed to "silence" or specifically block the production of disease-causing proteins before they are made. This technology can potentially be used to treat human diseases by "turning-off" genes that lead to disease in the first place. RXi Pharmaceuticals is using RNAi technology to develop RNA-derived molecules targeting disease-causing genes. Self-delivering rxRNA® (sd-rxRNA®) is a proprietary technology developed at RXi which has the potential to enable the efficient delivery of RNAi compounds without the requirement of an additional delivery vehicle. This technology has potential clinical applications for diseases where localized delivery is an option and also has the potential to be applied for indications requiring systemic delivery of RNAi. (Source: RXi Website, 14 January, 2010)

Charles River To Close Shrewsbury Lab

Charles River Laboratories International of Wilmington will close its 400,000-square-foot facility off Route 9 in Shrewsbury by the middle of the year, leaving 300 people without jobs. The company said it expects to save about $20 million this year as a result of the closing and that it would consider reopening the facility when the market for preclinical studies improves.

Charles River said it expects the preclinical research sector to begin showing improvement in the second quarter, but the last 15 months have seen "extended softness" throughout the contract research industry. The company bought the Shrewsbury facility in 2005 and later moved there from its building at 55-57 Union St. in Worcester, which it had outgrown. (Source: Matthew L. Brown, Worcester Business Journal, 12 January, 2010)

Acton Pharmaceuticals Hopes to Hire 100 in 2010

Fresh off landing $15 million in venture capital funding, Marlborough-based Acton Pharmaceuticals executives hope to hire up to 100 employees in 2010. The company, founded in 2008, specializes in development and marketing of respiratory products and plans to hire about 80 sales staff around the country and 10 to 20 managers in the next calendar year, according to president and COO Daniel L. Kreisler. Acton executives also recently finalized a deal with Forest Laboratories of New York to market and distribute that company's newest asthma inhaler product, Aerospan.

Kreisler and co-founder John W. Simon, who serves as CEO, are no strangers to the life science industry, or Forest Labs. Simon spent 10 years as vice president at Sepracor in Marlborough until 2007 and before that spent six years with Forest Laboratories. Kreisler spent 16 years with Forest before helping to co-found another company, JDS Pharmaceuticals, in 2004. The two started Acton Pharmaceuticals in 2008 with the intention of specializing in respiratory products. Forest Laboratories newest inhaler product, Aerospan, immediately piqued Kreisler and Simon's interest. "We see a tremendous unmet need in this field," Kreisler said. "Asthma is still not adequately controlled by medications on the market. The $15 million in venture capital funding will help Acton further develop the product, ready it for manufacturing, and develop a commercialization strategy. Acton plans to outsource manufacturing of Aerospan to 3M facilities in California and expects the product to be launched in the first quarter of 2011.

Kreisler and Simon were attracted to Aerospan because of its unique qualities that they hope will make it a hit in the $7 billion asthma-inhaler market. Like most asthma products, Aerospan uses inhaled steroids as anti-inflammatory medication. Asthma causes the airways to close and tighten, and products like Aerospan loosen the muscles and allow breathing. But Aerospan is different for two major reasons. Firstly, the product uses only environmentally-friendly chemicals in the inhaler's propellant. Aerospan also has a built-in spacer, which optimizes proper inhalation of the steroid. The spacer helps coordinate the breathing in of the medication with the pushing down of the inhaler. That increases the chances the medication will work effectively. (Source: Brandon Butler, MetroWest495, 26 January, 2010)

Genzyme Expands Framingham Campus

Genzyme has expanded its presence in Framingham with the lease of nearly 136,000 square feet at the 9/90 Corporate Center. The company now occupies more than 1.2 million square feet in Framingham at the Framingham Technology Park and 9/90 Corporate Center, which is near the intersection of Route 9 and Interstate 90, just east of Interstate 495. The company already occupied 26,000 square feet at 200 Crossing Blvd. in the complex and expanded to 80,000 square feet there. The company also leased a 55,000-square-foot building at 200 Staples Drive, according to CB Richard Ellis, the Boston-based commercial real estate broker that represented Genzyme in the deal. The lease was signed in mid-December. The complex's landlord is National Development and UBS Realty Investors, which were represented by FHO Partners of Boston in the deal. (Source: Matthew L. Brown, Worcester Business Journal, 2 February, 2010)

Caliper Life Sciences Makes Time Magazine's Top Discoveries List

The top 10 discoveries of 2009, according to Time Magazine, include identifying a possible cure for colorblindness, a comprehensive examination of the earliest human skeletal remains ever found and finding gallons of water on the moon. Add to that list Hopkinton-based Caliper Life Science's contribution: a robot that could revolutionize the way scientists perform experiments. "It beat out finding water on the moon," said Caliper CEO Kevin Hrusovsky. "This is truly a game-changing discovery."

Conceived by a British scientist and developed by Caliper, the robot can run an entire scientific experiment with virtually no human intervention. It can form a hypothesis, create a testing method, execute the procedure, analyze the results and revise the hypothesis. That means more scientific tests can be done faster and with better accuracy. "Having technology like this allows for a significant amount of additional experimentation and for even greater discoveries down the road," Hrusovsky said.

Working with robots and some of the world's leading scientists is nothing new to Caliper. The company began in the early 1980s with a specialty focus in robots. Today, Caliper offers a variety of products in lab automation, imaging technologies and development optimization techniques. The company works with scientists and engineers across the world to make tools that can accelerate the pace of study. For the robot that Time Magazine cited, the company teamed with Dr. Ross King of Aberystwyth University in Wales, who was studying yeast genes. "We work with people from Harvard, Stanford and MIT," Hrusovsky said. "Many of these academics are trying to innovate the next great technology. We're able to commercialize those great ideas." At any one time Caliper is working on about 10 of projects, but Hrusovsky said the company is always looking to partner with scientists to find a new breakthrough in technology.

Caliper's revenues have grown from about $25 million in 2002 to $130 million in 2009. Preliminary figures released in mid-January show the company could end the year in a cash-positive position. (Source: Brandon Butler, MetroWest495, 2 February, 2010)

Life Sciences Investment Outpaces Other Industries

Companies in the life sciences sector captured the largest share of venture capital during 2009, according to PricewaterhouseCoopers LLP. In a new report entitled "Under Recovery," PWC says life sciences funding for 2009 totaled $6 billion in 715 deals, accounting for 34 percent of all venture dollars invested, compared to 28 percent in 2008. Demand for new pharmaceuticals, diagnostics, and medical devices has the potential for further growth as the population ages, PWC said.

For all sectors, venture capitalists invested $17.7 billion in 2,795 deals in 2009, marking the lowest level of investment since 1997. Compared with 2008, investments into life sciences plunged 22 percent while the number of deals dropped 19 percent. In the last quarter of 2009, biotechnology investments totaled $1 billion in 108 deals with another $719 million going into 87 medical device and equipment deals. Biotechnology funding declined by 7 percent year over year. (Source: Matthew L. Brown, Worcester Business Journal, 10 February, 2010)

Glaxo to Stop Research on New Antidepressants as It Shifts Focus

GlaxoSmithKline PLC said it will stop research into new antidepressants and focus on diseases for which it believes it can develop more valuable drugs, a major shift for a company that developed some of the biggest-selling antidepressants of the past 20 years. Profits at the UK drug giant, which posted a 66 percent increase in fourth-quarter earnings were long fueled by antidepressants Paxil and Wellbutrin, which at their peak generated billions of dollars a year in sales. Similar medicines, such as Eli Lilly & Co.'s Prozac and Pfizer Inc.'s Zoloft, also generated big sales for those companies.

However, low-cost generic copies have eroded demand for name-brand antidepressants, which accounted for just 2.3 percent of Glaxo's total sales last year, down from 14 percent in 2002. Chief Executive Andrew Witty said Thursday that the company thinks further investment in the market wouldn't be prudent. Part of the reason is financial risk. Clinical trials of antidepressants are among the "most expensive and highest-risk" of all drug trials, Mr. Witty said, because companies often don't know until the end of very large studies whether a drug works. It is also hard to prove that a depression drug is working, he said, because patient improvement is measured by subjective mood surveys, and not by the clear-cut blood tests and biological measures used in other diseases. That's a drawback in an era when insurers and other health-care payers want to see clear value for their money, Mr. Witty said. Payers "want big benefits to make it worth their while to invest their resources," he said, adding that Glaxo would scrap research into pain drugs for the same reasons, focusing instead on diseases including Alzheimer's, Parkinson's, multiple sclerosis and a clutch of rare diseases.

Other companies, such as Lilly, Sanofi-Aventis SA and AstraZeneca PLC, continue to invest in antidepressant research. In December, AstraZeneca paid a biotech company $200 million for the rights to develop an experimental antidepressant. But companies generally are more eager to invest in cancer and diseases tied to aging, where the need for new treatments is greater.

Mr. Witty said Glaxo aims to invest even more of its research funds in experimental drugs discovered by outside academic groups and biotech companies, which he said would improve the company's return on investment. Overall it aims to boost its return on investment in late-stage drug development to 14 percent, from 11 percent currently.  (Source:  Jeanne Whalen, Wall Street Journal, 5 February 2010)

Pfizer Plans to Cut R&D by Up to $3 Billion

Pfizer plans to cut research-and-development spending by as much as $3 billion by 2012, in an attempt to wring efficiencies following its take-over of Wyeth without sacrificing future product development. The New York pharmaceutical giant outlined the aggressive cuts, which represent more than a quarter of the two companies' combined research budgets in 2008.

Research is considered the lifeblood of pharmaceutical companies. Big drug makers like Eli Lilly & Co. and Bristol-Myers Squibb Co. are increasing their spending to find new products that can replace aging blockbusters. Yet drug discovery is unpredictable, and industry scientists have struggled in coming up with big new products. Pfizer's announcement suggests executives believe its research hasn't been worth the high levels of investment.

The largest drug makers have been retrenching as blockbuster drugs start facing competition from less expensive generic versions. After early cost cutting focused on trimming sales representatives, companies have set their sights on labs and scientists. AstraZeneca PLC said it would cut about 3,500 research jobs as part of a larger work-force reduction.

Pfizer also targeted research previously, cutting as many as 800 research workers last year and closing six of 20 research sites as part of the Wyeth acquisition completed in October. Meantime, the $68 billion Wyeth takeover and other deals are filling Pfizer's pipeline with therapies discovered elsewhere. Chief Executive Jeffrey Kindler said he believes Pfizer has struck the "right balance" between efficiency and innovation by embracing deals and partnerships while still investing heavily in internal research. "The days of a monolithic approach to either research or commercialization are behind us," he said.

Pfizer said its research expenses would be $8 billion to $8.5 billion in 2012. The combined research spending for the two companies was $11 billion in 2008, the last full year before the merger. Chief Financial Officer Frank D'Amelio said the research cuts are aimed to reduce overlaps in the two companies. The planned cuts are part of a total of $7 billion in savings Pfizer expects to realize from both the Wyeth deal and its cost-cutting efforts begun before the acquisition. Pfizer will still have among the industry's biggest research budgets, company officials said.

Chief executives at GlaxoSmithKline PLC and Sanofi-Aventis SA have talked about the poor returns from company labs and are reworking their approach to drug development. Sanofi Chief Financial Officer Jerome Contamine said in July that the company planned to cut R&D spending by 20 percent between 2008 and 2011.

Consultants like Terry Hisey, vice chairman and U.S. life sciences leader at Deloitte LLP, is telling drug makers that it is "more cost effective" to bring in promising therapies from the outside than trying to develop them all in-house. Yet Sanford Bernstein analyst Tim Anderson said the research cuts by drug conglomerates could "come back to bite" the companies because they will need new products. (Source:  Jonathan Rockoff, Wall Street Journal, 4 February 2010)

Novartis Puts Bet on Heart Treatment in Deal Worth Up to $620M

Novartis AG said it is paying up to $620 million for the world-wide rights to an experimental heart drug in a deal that boosts the Swiss drug maker's portfolio of cardiovascular medicines. Novartis, based in Basel, is buying privately held US bio-pharmaceutical company Corthera Inc., based in San Mateo, California, for $120 million. If the experimental drug, called Relaxin, meets certain development and revenue goals, Corthera's current shareholders would be eligible for additional payments of up to $500 million, Novartis said.

Novartis's portfolio of cardiovascular medicines is built around its blood-pressure-lowering pill Diovan, which will start to face competition from cheaper generics as early as next year. Diovan is Novartis' best-selling drug, with annual sales of close to $6 billion last year.

Relaxin is in late-stage development as a potential treatment option for patients who have acute decompensated heart failure, an illness that typically afflicts older people. Novartis is expecting to submit the drug for regulatory approval in both Europe and the US in 2013. (Source: Anita Greil, Wall Street Journal, 24 December 2009)

AstraZeneca to Acquire Novexel

UK drug maker AstraZeneca said it has agreed to acquire Novexel, in a deal that adds to its pipeline of potential new drugs to tackle infections and deepens an alliance in the field with Forest Laboratories Inc. The deal centers on Paris-based Novexel's two most advanced drug-development programs, CAZ104 and CEF104, which aim to treat infections that have gained resistance to existing antibiotics, a trend that is spurring research into new anti-infective medicines.

Under the terms of the deal, AstraZeneca will pay $350 million to acquire Novexel's shares and $80 million for its cash. If certain milestones in the development of its drug programs are met, shareholders in the French company will receive another $75 million, AstraZeneca said. However, once the deal has been completed, Forest has agreed to pay AstraZeneca half of whatever it spent on the acquisition in total.

AstraZeneca said it will share the costs of developing CAZ104 and CEF104 with Forest, and the companies have agreed that Forest will sell them in North America should they reach the market, while AstraZeneca will market them in Europe and most other countries.  CAZ104 is a combination of a compound developed by Novexel called NXL-104 and ceftazidime, an antibiotic that is facing resistance from strains of bacteria.  The addition of NXL-104 helps to overcome that resistance, according to AstraZeneca. The drug is being developed to treat serious infections in the abdomen and urinary tract, as well as pneumonia, and is scheduled to enter Phase III clinical trials in late 2010. CEF104 is a combination of NXL-104 and ceftaroline, a novel antibiotic from Forest to which AstraZeneca bought the European rights in August.

The demand for new anti-infection drugs is being driven by the ever-increasing development of bacterial resistance to the current antibiotics. AstraZeneca wants to build a franchise in the treatment of infection and has created a research facility dedicated to its study in the US. In July, it said it would continue to develop CytoFab, which is an experimental treatment for severe sepsis licensed from BTG PLC.  (Source:  Jason Douglas, Wall Street Journal, 24 December 2009)

Biogen Idec Has To Look Beyond Facet

Facet Biotech Corporation is outright rejecting the buyout offer from Biogen Idec Inc. The company issued a press release stating that the stockholders rejected Biogen Idec's unsolicited tender offer for $17.50 per share.  Furthermore, it noted that Biogen Idec has terminated its tender offer after the company recently raised its offer as a "last and final offer."

The company did note that it offers Biogen Idec the opportunity to conduct due diligence discussions to see if a materially increased offer could be made.  Facet has a pipeline of five clinical-stage products and is seeking to identify and develop new oncology drugs and applying its proprietary protein engineering technologies to potentially improve the clinical performance of protein therapeutics.  Its main targets are in oncology for cancers, which could have opened a new pipeline up for Biogen Idec. (Source:  Jon C. Ogg, BioHealth Investor, 17 December 2009)

FDA Rejects J&J Antibiotic Developed with Swiss Partner

The FDA has rejected a promising antibiotic, the superbug drug ceftobiprole being developed by Johnson & Johnson and Swiss partner Basilea Pharmaceutica AG for complicated skin infections, telling the companies it had serious questions about the reliability of late-stage clinical trials J&J conducted to make the case for approving the drug. The companies said the FDA would require additional studies before approving the drug - a condition that analysts said could delay its reaching the market for as long as three more years.

Ceftobiprole aims to treat complicated skin and soft tissue infections, including diabetic foot infections. J&J and Basilea have touted the drug as a novel agent against antibiotic-resistant bacteria, including methicillin-resistant Staphylococcus aureus, or MRSA. Analysts estimated annual sales of as much as $300 million for the drug if approved to treat skin infections, and $1 billion if permitted for other uses.

The drug has been approved in several countries, including Canada, where it is called Zeftera. European health regulators are weighing approval after their own delay. Basilea expects a decision in the first quarter of 2010.

The news isn't only a setback for a potential new treatment against antibiotic-resistant infections, but the latest twist in a continuing dispute between the companies over J&J's handling of the late-stage studies. It also reflects the challenges and risks inherent in the growing number of joint-venture partnerships between Big Pharma and small biotechnology companies that have become an increasingly important strategy in the quest to develop new medicines.

For pharmaceutical giants such as New Brunswick, N.J.-based J&J, the partnerships are a way to acquire promising therapies without buying the smaller firms outright. Drug makers are looking to biotech companies, in part, because their own research labs have struggled to come up with new products. The big companies face patent expirations in the next few years on major drugs with more than $30 billion in annual sales. Biotechs, in turn, are in the throes of one of the toughest financing climates in the industry's 30-year history, all but shutting them out of the capital markets. Many have sought out pacts with pharmaceutical companies for both the cash and the expertise needed to give promising compounds in midstage development the final push to surmount costly hurdles and land on the market. (Source: Jonathan D. Rockoff and Julia Mengewein, Wall Street Journal, 21 December 2009)

Novartis to Gain Full Ownership of Global Leader in Eye Care

Novartis intends to gain full ownership of Alcon, a global leader in eye care, by first completing the April 2008 agreement with Nestlé S.A. to acquire a 77 percent majority stake and subsequently entering into a direct merger with Alcon for the remaining 23 percent minority stake. "The addition of Alcon will strategically strengthen our healthcare portfolio and our position in eye care, a sector with dynamic growth due to the increasing patient needs of an aging population," said Dr. Daniel Vasella, Chairman and CEO of Novartis. Novartis' costs for full acquisition of Alcon, including the initial 25 percent stake purchased in mid-2008, are estimated at 49.7 billion.

Alcon and Novartis both have attractive global activities in eye care, each offering their own competitive positions in highly complementary segments that together cover more than 70 percent of the global vision care sector. Following successful completion of the merger, Alcon would be established as a new Novartis division that incorporates these highly complementary assets. This new eye care division will have enhanced opportunities to accelerate expansion in high-growth regions, generate greater value from combined product portfolios and capitalize on strengthened R&D capabilities. (Source: Novartis Website, 4 January, 2010)

Genzyme Shifting Work from Allston Plant; Jobs Unaffected

Genzyme will move all its filling, packaging, and distribution operations out of its Allston drug manufacturing facility because of the latest problems involving contamination at the plant. Genzyme officials said that they had entered into an agreement with drug maker Hospira Inc., based in Lake Forest, Illinois, to take over the filling and finishing process so that Genzyme will be able to replace part of its manufacturing equipment. Genzyme will also move the bulk of the operations to its own site in Waterford, Ireland. The shift in operations will not result in the loss of any jobs, the company said.

The changes come after bits of steel, rubber, and fiber were found in Genzyme's medications, which are packaged in glass vials and distributed to doctors to be administered intravenously. The company decided to move the operations after a three-week FDA investigation in November found new contamination at the Allston site. It was only the latest problem at the plant. Last summer, a viral contamination forced the company to ration two drugs, Cerezyme and Fabrazyme, both of which are used to treat rare genetic disorders.

"We're continuing to take steps to address the challenges we faced at the facility in 2009," Genzyme spokesman Bo Piela said. "One of those steps is the need to update the filling and finishing capability at the [Allston] plant." Piela said the company will replace manufacturing equipment associated with the final stages of the process, including distribution. Under the new agreement, Hospira will do that work for Genzyme through 2015. The agreement must be approved by the FDA. Piela said the FDA must approve the move before Genzyme can take action, a process that could take about six to eight months.

He said the changes should not further complicate past problems with maintaining the supply of medications to patients. Genzyme distributes Cerezyme, Fabrazyme, Myozyme and Thyrogen out of its Allston plant; it manufactures Myozyme and Thyrogen at another location. (Source:  Megan Woolhouse, Boston Globe, 5 January  2010)

Vertex Cystic Fibrosis Drug Meets Goals

Vertex Pharmaceuticals said its experimental cystic fibrosis drug VX-809 has met key safety and tolerability goals in a midstage study. The company also said the drug prompted a response in a key protein for patients in the study, though that was not the study's main goal. The results are preliminary, Vertex noted. The study involves 89 patients receiving one of four doses of VX-809, or a placebo, in addition to standard therapies, for 28 days. The company plans on moving forward with combining VX-809 with its other experimental cystic fibrosis drug, VX-770, for additional studies in the second half of 2010. Cystic fibrosis causes a fluid imbalance in the lungs, resulting in mucus plugging, infection and inflammation. (Source: Associated Press/Boston Globe, 4 February 2010)

$3 Million for Life Sciences Grants Approved by Massachusetts Life Sciences Center

The board of the Massachusetts Life Sciences Center, a quasi-public agency formed to oversee the state's $1 billion life sciences initiative, yesterday approved up to $3 million in new matching grants to small businesses in 2010. Under its new small-business matching grant program, the center will give as much as $500,000 to start up biotech, medical device and diagnostic companies that have received federal funding from agencies such as the National Institutes of Health, the National Science Foundation, or the Department of Defense. The center said it will focus on emerging life sciences businesses with production-ready products and high potential to create jobs in Massachusetts. (Source:  Robert Weisman, Boston Globe, 28 January 2010)