Big money, big data, and some big layoffs made the biggest headlines in biopharma during 2013. So did big layoffs by big pharma, and a big political squabble that resulted in NIH and FDA closing most of their doors for 16 days. Below are details of these and more of the biggest biopharma developments of the past 12 months.
DIRECT-TO-CONSUMER TESTING: FDA Calls Out 23andMe
The FDA laid the proverbial hammer on direct-to-consumer gene testing pioneer 23andMe in November, ordering the company to stop selling its Saliva Collection Kit and Personal Genome Service (PGS), while obtaining agency approval to market the $99 “spit kit.” The company promised to comply, while adding it will continue to provide consumers both ancestry-related information and raw genetic data without interpretation, continue conducting research using its database of genetic and phenotypic data, and maintain its educational efforts.
In a warning letter to 23andMe, FDA’s Center for Devices and Radiological Health (CDRH) said it considered PGS as being “intended for use in the diagnosis of disease or other conditions or in the cure, mitigation, treatment, or prevention of disease, or is intended to affect the structure or function of the body.” The enforcement action drew sharp criticism from free-market advocates who echoed 23andMe and its CEO Ann Wojcicki in arguing the tests were not diagnostic in nature, but intended only to furnish data upon which health decisions could be based. In responses posted on the company’s blog, critics also accused FDA of attempting to stifle innovation for the benefit of big pharma and doctors—an argument denied by Commissioner Margaret A. Hamburg, M.D., who contended the agency’s sole focus was ensuring patient safety.
Both sides have reduced their rhetoric in recent days, with Wojcicki acknowledging her company had not communicated proactively enough with FDA, and the agency insisting it’s not trying to kill DTC genetic testing. That’s usually the first sign of a meeting of minds, but whether that happens won’t be apparent until next year at the earliest.
DRUG DEVELOPMENT: Hepatitis C, Diabetes, Respiratory, and Cancer Approvals
Hepatitis C saw a few new drugs approved by FDA—including Olysio (simeprevir) from Johnson & Johnson’s Janssen Pharmaceuticals unit, while Gilead Sciences’ treatment Sovaldi (sofosbuvir) could boast that it was the first drug to ever show sufficient safety and efficacy to treat certain types of HCV infection without the need for injection of interferon at the same time.
Olysio was approved in combination with interferon and ribavirin, and Solvadi, with ribavirin or with ribavirin and peginterferon-alfa. AbbVie reported positive Phase III results for its genotype 1 Hep C drug candidate, three direct-acting-antiviral (3D) regimen plus ribavirin, namely 96% sustained virologic response after 12 weeks, or SVR12.
Earlier this year Janssen won FDA marketing authorization for Invokana (canaglifozin) tablets, the first sodium-glucose co-transporter 2 (SGLT2) inhibitor approved as a diabetes treatment; the drug is indicated for adults with type 2 diabetes. FDA approved three Takeda drugs for type 2 diabetes in a single day in January—Nesina (alogliptin) tablets, Kazano (alogliptin and metformin hydrochloride) tablets, and Oseni (alogliptin and pioglitazone) tablets.
GlaxoSmithKline (GSK) and Theravance won the agency’s nod for the chronic obstructive pulmonary disease (COPD) drug Breo Ellipta, a once-daily inhalable drug that is expected to rack up blockbuster-level sales of more than a billion dollars—sales GSK will need in order to recoup losses expected in a few years once generic versions of its best-selling product, Advair, reach the market.
Among cancer drugs approved this year were Celgene’s Pomalyst (pomalidomide) for multiple myeloma, while Roche’s Genentech subsidiary won authorization to market Gazyva (obinutuzumab or GA101), in combination with chlorambucil chemotherapy for people with previously untreated chronic lymphocytic leukemia (CLL)—the first drug on which FDA bestowed its “Breakthrough” designation. Genentech also won FDA’s approval for the Herceptin-DM1 combination drug Kadcyla (T-DM1 or ado-trastuzumab emtansine), for patients with HER2-positive, metastatic breast cancer. GSK hit the proverbial trifecta in May, as FDA approved two of its melanoma drugs—Tafinlar (dabrafenib) and Mekinist (trametinib)—and a companion diagnostic designed to detect the gene mutations expressed by the tumors each treatment is designed to fight. Bayer and Algeta won FDA approval for their prostate cancer drug Xofigo in May, six months before Bayer offered to buy its partner for about $2.4 billion.
Cancer drugs account for 22% of Phase III pipelines among top-25 drug companies, and 30% of Phase II, according to a Decision Resources report released in November.
GENE PATENTING: Myriad of Lawsuits
Companies looking to patent human genes won a mixed verdict from the U.S. Supreme Court in June, when the justices unanimously ruling that Myriad Genetics’ claims for seven patents related to breast cancer susceptibility genes BRCA 1 and 2—but also holding that companies can patent composite DNA (cDNA) and other synthetic genetic material that does not meet the “Product of nature” exemption from patentability.
While some experts predicted a rush of competition leading to plunging prices for genetic tests, Myriad refused to roll over, instead vigorously defending its remaining 17 BRCA patents by suing, one-by-one, several of its rivals on infringement grounds: Ambry, Gene by Gene, Gene Dx, Quest Diagnostics, Invitae, and most recently, Laboratory Corporation of America (LabCorp). “It seems that the Supreme Court’s decision has really spurred Myriad to defend its perceived IP as much as possible against these companies,” much as Amgensuccessfully held off rivals for its erythropoetin products a decade ago, noted George Yu, an attorney with the law firm Schiff Hardin, told GEN.
“There isn’t a case that comes to mind for diagnostics, and maybe that’s somewhat due to the ability to diagnose conditions and diseases in certain ways. It would seem you would need some portion of the BRCA gene to diagnose susceptibility to breast cancer due to your BRCA genotype,” Yu added.
Myriad also rolled out new tests. In September, the company launched its myRisk Hereditary Cancer™ test, a 25-gene panel covering eight major cancers (breast, colorectal, endometrial, gastric, melanoma, ovarian, pancreatic, and prostate) at an average selling price of $3,700. In October the company introduced myPlan™ Lung Cancer, which carries a $3,400 list price; followed in November by myPath™ Melanoma, which has an average selling price of $1,500. By 2015, Myriad has said, it expects to discontinue several current tests, including the BRACAnalysis test at the center of the Supreme Court case.
IPO MARKET: Revival at Last
The initial public offering (IPO) market finally delivered on years of revival hype by roaring back in 2013, with no less than 55 therapeutic, diagnostic, and industrial/agricultural biopharma companies going public this year as of December 10. According to data by Burrill & Co., they raised a combined $6.236 billion, one third of which came from the year’s single largest IPO, Zoetis, Pfizer’s animal-care spinout, with more than $2.2 billion raised. Zoetis was followed by CRO Quintiles ($525 million raised); and eye disease drug developer Ophthotech ($167 million).
“A lot more money is coming into the sector,” Edward Ahn, Ph.D, managing director and CSO of MedCap Advisors, told GEN. The revival of the overall market was definitely one factor, since it brought more generalist investors back to make investments, he said. Yet investors also responded to FDA’s quickening pace of review and decisions on new drugs, aided by last year’s enactment of the 2012 Food and Drug Administration Safety and Innovation Act; and what Dr. Ahn said was a scarcity of quality companies in which to invest.
He said another factor in the IPO revival was the Jumpstart Our Businesses (JOBS) Act, whose provisions include a five-year exemption from the Sarbanes-Oxley Act and confidential IPO pricing for smaller companies issuing their first public shares: “The regulations have really helped some small companies take their company public.”
JOBWATCH: Layoff-Go-Round Continues
Round and round big pharma cost-cutting goes, and where (and when) the layoffs stop, nobody knows. Merck & Co. wielded the sharpest axe in 2013, when it said October 1 it will eliminate 8,500 jobs worldwide by the end of 2015, as part of a restructuring that will include shrinking its real estate footprint in New Jersey and moving its headquarters within the Garden State.
Not far behind, AstraZeneca announced it was shedding an additional 3,900 additional jobs—2,300 selling, general, and administrative (SG&A) employees plus 1,600 R&D staffers. Those layoffs brought to 5,050—roughly 10% of the current workforce—the number of positions to be jettisoned through 2016. Also eliminating large numbers of jobs were Eli Lilly (1,245 U.S. sales reps due to expected patent-cliff revenue losses); Novartis (nearly 1,000 jobs at Ciba Vision, a consumer drugs plant in Lincoln, NE, and most recently 325 R&D staffers); and Endo Health Solutions (about 700 jobs, after failing to stop a generic version of its Opana ER [oxymorphone HCl] moderate-to-severe pain drug from reaching the market).
The biggest layoff wave not to occur was the 5,000-job elimination announced by Teva in October. Israeli officials reacted with thunderous criticism, and the company withdrew its plans some three weeks later—a factor speculated as leading to the CEO’s resignation .
LAWSUITS: Maryland Wins on DNA Testing; Sequenom Loses on Diagnostic Patent
A divided U.S. Supreme Court in June sided with the state of Maryland, and much of the nation’s law enforcement community, by ruling yesterday that authorities can take the DNA of criminal suspects upon arrest but before they are convicted of a crime. A 5–4 high-court majority sided with Maryland officials, who maintained that the state acted properly when it collected DNA by swabbing the cheek of Alonzo Jay King, Jr., when he was arrested in 2009, a year after the state expanded DNA sample collection to include suspects of felony first-degree assault. King was arrested on that charge, later dropped, as well as a misdemeanor or second-degree assault charge of which he was initially convicted. In dissent, Justice Antonin Scalia said the taking of DNA samples from persons not convicted of crimes violated the Fourth Amendment by searching for evidence of a crime without a basis for belief of guilt or incrimi¬nating evidence.
In October, Judge Susan Illston of the U.S. District Court for the Northern District of California invalidated via summary judgment a Sequenom-licensed patent covering the detection of fetal cell-free DNA in the bloodstream of pregnant women. Judge Illston upheld a challenge from Ariosa Diagnostics, declaring that U.S. Patent No. 6,258,540 covered patent-ineligible subject matter—namely the presence of fetal DNA in the mother’s blood, which the judge said fell into the natural-phenomenon exemption from patentability under Section 101 of the U.S. Patent Code. Sequenom—which has said it will appeal the decision—used the patent to protect its MaterniT21 Plus noninvasive prenatal diagnostic test, which unlike older techniques such as amniocentesis or chorionic villus sampling doesn’t carry the same risk of miscarriage.
M&A DEALS: Thermo Fisher, Amgen Bag the Biggest Buys
Thermo Fisher bagged the year’s biggest deal in April when it agreed to acquire Life Technologies for $13.6 billion, plus assumption of Life Tech’s $2.2 billion in debt. The transaction created a powerhouse in biopharma lab instrumentation and supplies with combined revenues of $16.3 billion and about 50,000 employees. But that workforce is expected to shrink over three years, as Thermo plans to cut $250 million by combining infrastructure with Life Tech, plus another $25 million by combining the companies’ commercial capabilities. In November, Thermo won European Commission clearance after agreeing to shed its cell culture (sera and media), gene modulation, and magnetic beads businesses. The deal is expected to win all remainingregulatory approvals and close in 2014.
Next-biggest deal was Amgen’s $9.7 billion buy of Onyx Pharmaceuticals, in a deal that added Onyx’s multiple myeloma drug Kyprolis (carfilzomib) and two other drugs to Amgen’s cancer holdings. Valeant Pharmaceuticals snapped up Bausch & Lomb for $8.7 billion, creating a more-than-$3.5 billion-a-year eye-care giant—while Perrigo snapped up Elan for $8.6 billion, ending months of uncertainty about Elan’s future that included a hostile takeover bid by Royalty Pharma. On the smaller end of deals, Cubist Pharmaceuticals spent $1.2 billion on a pair of acquisitions, Trius Therapeutics (for $707 million) and Optimer Pharmaceuticals (an additional $535 million). And China’s BGI-Shenzhen cleared U.S. and Chinese regulatory hurdles to acquire Complete Genomics for $117.6 million.
Not all deals succeeded: PharmAthene called off a planned merger with Theraclone Sciences for an undisclosed price, about a week after Theraclone was turned down for federal funds to advance development of its recombinant fully-human monoclonal antibody TCN-032 into Phase II trials for serious influenza, including pandemic flu.
NOTABLES: Resignation, Innovation, Incarceration, Recognition, and Acclamation
- Jeremy Levin, D.Phil., stepped down in October as CEO of Teva Pharmaceutical Industries after just 17 months on the job, after the company disclosed later-withdrawn layoff plans (see JOBWATCH on page 1), reportedly following disagreements with the company’s board of directors led by Phillip Frost, M.D.
- J. Craig Venter unveiled a digital biological converter capable of creating a copy of an organism from a distant location—“a biological fax machine,” as The New York Times put it.”
- In an exclusive GEN interview, onetime Fortune 400 member and “king of biotech” David Blech blamed a desire to recreate his past and his bipolar disorder for actions resulting in his going to prison on federal charges of “manipulative and fraudulent trading activity.”
- Novo Nordisk ended its association with marketing spokeswoman Paula Deen after the celebrity chef admitted to using a racial slur during a deposition in a since-dismissed workplace discrimination case.
- James E. Rothman, Ph.D., of Yale University; Randy W. Schekman, Ph.D., of the University of California, Berkeley; and Thomas C. Südhof, M.D., of Stanford University co-won this year’s Nobel Prize in Physiology or Medicine for their discoveries on how key molecules are transported within and outside the cell through vesicles.
- Martin Karplus, Ph.D., of Harvard University and France’s Université de Strasbourg; Michael Levitt, Ph.D., of Stanford University School of Medicine; and Arieh Warshel, Ph.D., of the University of Southern California won the chemistry Nobel Prize for laying the groundwork behind today’s computer models for understanding and predicting chemical processes.
- And a past double-Nobel laureate, Frederick Sanger, acclaimed as “father of the genomic era” for research that laid essential groundwork for the sequencing of amino acids and later DNA, passed away November 19 at age 95.
RESEARCH: CRISPR, Junk DNA, and Big Data
Nearly a year after its designation by Science as a runner-up for Breakthrough Technology of the Year 2012, GEN made its own pronouncement on CRISPR (clustered, regularly interspaced short palindromic repeats) and CRISPR-associated (Cas) proteins, saying the technologies have come of age.
As GEN’s Patricia Fitzpatrick Diamond, Ph.D., reported in July, researchers believe that recent breakthroughs in understanding the mechanisms of CRISPR/Cas offer great potential for biotechnological applications and understanding evolutionary dynamics. Unlike other tools, CRISPRs are constructed from RNA—a cheaper and easier starting material. CRISPRs can be designed and customized to induce cuts at precise location in the genome, and can make nicks simultaneously at more than one genomic location, allowing researchers to look at the effects of combinations of mutations. Indeed, CRISPR’s gene editing methods, along with those of developing the gene editing methods of TALENs (transcription activator-like effector nucleases), are the basis of a new startup company founded in November by five pioneers in genome editing technology, Editas Medicine.
This year could be remembered as the year researchers finally figured out the value of “junk” DNA. Scientists at Sydney’s Centenary Institute reported in August that the 97% of human DNA long referred to as junk is actually a previously unknown mechanism for regulating the activity of genes, thus increasing human understanding of the way cells develop and pointing to new possibilities for therapy. In a study published in Cell, John Rasko, Ph.D., and a team including Centenary’s head of bioinformatics, William Ritchie, Ph.D., showed how particular white blood cells used noncoding DNA to regulate the activity of a group of genes that determines their shape and function.
Big data’s promise for lowering healthcare costs and advancing personalized medicine—McKinsey Global Institute estimates institutions could generate up to $100 billion in value annually by applying big data strategies—led Berg to join Mount Sinai’s Icahn School of Medicine in launching a pharmaceutical and diagnostic R&D partnership designed to leverage the power of multi-omic biology and data analytics.
SEQUESTRATION: Agencies Cope with Across-the-Board Budget Cuts
NIH, FDA, and all other federal agencies were forced to cut spending across the board—by about 5% for nondefense agencies—in March to comply with the “sequestration” agreed to by both houses of Congress and President Obama in their Budget Control Act of 2011. The agencies fared worse in October, when the absence of a budget forced the federal government into a partial shutdown that lasted more than two weeks and made Congress the butt of jokes nationwide, from late-night TV comics to researchers and professional groups frustrated by their inability to get grants.
“As America keeps hitting the brakes on scientific research, we are, in effect, accelerating the damage done to our continued leadership in global bioscience, in health outcomes, and in the economic power that we have always derived from basic research,” Stefano Bertuzzi, Ph.D., executive director of the American Society for Cell Biology (ASCB), said during the partial shutdown.
Washington got back to work October 17, following a deal in which Obama joined the Republican-led House of Representatives and Democratic-led Senate in funding the federal government through January 15 and raising the nation’s borrowing limit or “debt ceiling” through February 7. The relative calm between the parties stretched into December with a bipartisan budget agreement for FY 2014 that will likely reverse much of the sequestration cut, though detailed agency budgets had yet to be decided at deadline. Also anybody’s guess is how long the era of good feeling will last into 2014, since a re-election year for the entire House and one-third of the Senate can be expected to re-ignite the partisan squabbling seen through so much of 2013.