Teva Buys Cogenesys

Teva said this morning it was buying the albumin-fusion technology company Cogenesys for $400 million. Cogenesys spun out of Human Genome Sciences with $55 million in funding in 2006. (Our 2006 profile of the spinout can be found here.)

We remember when the phrase albumin fusion could only have referred to a Spanish egg-white omelet. Oh, Science, how far you've come!

Teva joins a host of pharmaceutical firms bulking up in large molecule capabilities and drug candidates, a phenomenon we've described in detail several times, perhaps most comprehensibly here. Nothing new there, then.

But for generics giant Teva, this deal is as much about deepening its stake in the ill-defined, yet surely valuable, follow-on biologics arena as is it about biologics capabilities per se. The Israeli group already joined the biogenerics (er, we mean biosimilars) bandwagon in 2003, via its $3.3 billion acquisition of Sicor. This isn't quite the same, though. Cogenesys technology isn't aimed at producing copies of marketed biologics, but at improving them.

The technology, which Human Genome Sciences developed after it acquired Principia Pharmaceutical Corp. (a spin-out of Aventis Behring) in 2000 for $135 million, fuses albumin with a therapeutic protein at the genetic level; translation of the fused genetic code results in a protein with the properties of the therapeutic protein and the long-half-life of albumin. (See diagram below.) The technology's main competition is the more-familiar PEGylation, which also creates longer-lasting protein therapies, though Cogenesys has consistently claimed its technology works better than PEGylation.

Albumin fusion proteins' partnership potential has been validated, first by Human Genome Sciences. That company's Albuferon long-acting interferon is being co-developed with Novartis in hepatitis C. Cogenesys has done some deals of its own since spinning out of HGSI--in 2006 the company struck alliances with PDL BioPharma and Vegenics.

Teva has long worked in both generics and, to a far smaller degree, in innovative R&D (remember MS drug Copaxone?) But competition's hotting up on the small molecule side, and there's continuing uncertainty around the US regulatory aspects, and hence commercial potential, of straight biosimilars. So this deal--for improved, IP-protected versions of existing large molecules--illustrates where Teva, along with plenty of others, including innovators, feel the future may lie: somewhere in between copying and innovating, combining the low-risk of the former with the patent-defense (and, one assumes, the regulatory pathway) of the latter.


Photo 'Egg whites omelet from Prana' by Flickr user Table For Three, Please used under a Creative Commons license. Albumin fusion diagram from Cogenesys.

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Biosimilars in Europe: Docs Decide

Biosimilars may have won a regulatory pathway in Europe, but they’re having a tough time getting to patients. Last week Spain became the second of Europe’s big five markets, after France, to announce this year that biologic drugs cannot automatically be substituted. Italy is expected to announce a similar decision before year-end.

In many European countries, pharmacists are required—sometimes incented—to dispense a cheaper generic equivalent of whatever brand a doctor has prescribed, if one is available. The rulings in Spain and France mean that this principle won’t hold for biologic drugs—a category for which substitution rules have not, until the advent of biosimilars, been needed at all.

It’s a blow for biosimilar firms, banking on their products’ lower price and perceived equivalence to reference biologicals in order to gain market share.

Doctors will henceforth have to specify which precise brand they want to dispense; if they don’t, “pharmacists will have to check back with the doctor,” according to Thomas Bols, Chair of EuropaBio’s Biosimilar Working Group and Director, Government Affairs, Amgen.

Now granted, for most biologicals we’re talking hospital docs, working in a specialized setting. But the situation still sounds somewhat complex, particularly given biosimilar firms’ apparent victory when Sandoz’s EPO was granted the same international non-proprietary (INN) name as its reference drug, J&J’s Eprex. (Both are epoetin alfa, and you can read more here.)

Same non-proprietary name, same drug, right? Wrong. Bols admits that this particular INN decision from the World Health Organization (in charge of INN naming), came as a surprise to the innovator lobby. But, he adds, any lingering questions over the appropriateness and enforceability of INN rules “only emphasize the need for good rules on automatic substitution.”

For him, a good rule is what’s emerged in France and Spain, as well as in the Netherlands and some Nordic countries: placing the onus on doctors to explicitly prescribe the generic. That means docs need to understand both sides’ arguments. Fine for the innovators—marketing is a big part of what they do. Not so fine for generics firms, for which marketing falls outside of their strategic and financial scope.

Now granted, in countries like Germany, doctors too are incented by budgetary restrictions to prescribe cheap drugs where possible. Similar cost-pressures apply in hospitals. But all doctors also hear innovator lobbyists emphasizing that “approval [of biosimilars] is based on a limited safety package,” as Bols clarified to IN VIVO Blog, and that there are “important therapeutic differences” between biosimilars and innovator drugs. What doctor is going to prescribe a biosimilar for which there’s little or no on-market experience, rather than a branded drug, in particular for chronic conditions?

The European Generics Association, representing biosimilar firms, calls all this scare tactics. According to Suzette Kox, the EGA’s Senior Director of Scientific Affairs, the Spanish decision “won’t impact [doctors’] prescription of biosimilar medicines” but “raises concerns because it is based on perceptions created by certain interested parties, and on a lack of scientific information and knowledge.” She argues, as EGA has all along, that manufacturing changes to any reference drug—a new plant, a new cell line or whatever—introduce variability within innovator products that’s analogous to that between an innovator drug and a biosimilar, yet all batches of innovator drugs like Eprex are assumed to be interchangeable. “The same scientific approach should apply to biosimilar medicines,” she asserts, “as there is no fundamental difference between biosimilar and their respective reference products.”

Some docs will believe that; some, too, might read the EMEA guidelines which state that trials of biosimilar medicines are required to demonstrate that there are “no meaningful differences between the biosimilar and the biological reference medicine in terms of safety or efficacy” before approval is granted.

The fact is that no-one really knows just how similar biosimilars are to reference drugs, and they won’t know until such products have had several years’ worth of market exposure. That’s why the question of how often and how widely these drugs should be prescribed is being passed like a hot potato: EMEA left the substitution decision up to member states, and governments have now passed it on to doctors.

That’s not, fundamentally, a bad situation: why shouldn’t prescribers decide? Brand-specific prescribing also makes pharmacovigilance easier; indeed, this is a key argument that innovators put forward in favor of the approach.

Once such pharmacovigilance data is available, splattered all over the web and in cost-conscious health ministries’ hands, it’s possible—granted no nasty surprises--that some of these rulings on non-substitution may be reversed. (And maybe by then the US will pass biosimilars legislation, too.)
In the meantime, though, biosimilars will be treated with caution--short of any radical new government cost-cutting measures that speak louder to docs’ pockets than clinical scare stories do to their scientific judgment.

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Generic EPO Should be a Big Deal. But Is It?

Novartis’ Sandoz division was on Friday granted European Commission approval for its biosimilar version of Johnson & Johnson’s epoietin alfa (Eprex). It’s not a huge surprise, given the positive recommendation earlier this summer, and given that Sandoz has done this before: growth hormone Omnitrope became the first biosimilar drug to gain European approval last year (and, after a long legal kerfuffle, got onto the US market, too).

But this should nevertheless be a big deal. We’re talking, after all, about a cheaper copy of EPO, the blockbuster anemia drug that made Amgen. A drug with sales that top $7 billion globally. Of all the biologics in generic firms’ sights, this has to be by far the most valuable--the "killer biologic," as one of you readers put it in a comment on a previous post. EPO is one of the most expensive drugs on many hospital formularies, and accounts for a huge chunk of payor expenditure.

At last!, we should be saying, the long-threatened generic biologics revolution has come to pass. Injectables will get cheaper, patient access will improve, originators will be forced to innovate and move on.

The reality isn’t quite so revolutionary. Sandoz is one of the few companies with the resources to persevere with biosimilars; many smaller firms dropped out as it became clear how onerous clinical trial and regulatory requirements would be.

Commercialization ain’t a slam dunk, either. Sure, a 20% discount counts given the prices of these drugs. But it’s up to individual countries to decide on whether docs may substitute the originator drug with a biosimilar. Innovators have done a good job lobbying against interchangeability. Questions and concerns over safety standards mean that biosimilar firms have an uphill struggle on the marketing and educational front, ensuring that these products are perceived as equivalent, not potentially dangerous cheapies.

Still, Sandoz will be helped considerably by the fact that its biosimilar has been granted the same international non-proprietary name (INN) as the reference drug, epoietin alfa (to the delight of the European Generic Medicines Association, since this goes some way at least to proving their case for scientific equivalence). Sandoz’s EPO will be available under three different brand names, though, likely in order to leverage locally-recognized and trusted generic brands across the various European markets.

Stada, another surviving biosimilars stalwart, had to settle for a slightly different INN for its generic EPO--epoietin zeta, filed in June 2006. That probably helped drive their decision to hand over commercialization to US-based specialist hospital marketer Hospira last November. The move was about “curbing financial risks” associated with the project, whose approval, as the press release optimistically states, “is still possible in late 2007”. Also last year, Mayne Pharma pulled out of a marketing deal with Pliva (now part of Barr Pharmaceuticals) on generic EPO. The product was approved in Croatia in 2005 but hasn’t got past the EU regulators.

In sum, Sandoz's approval in itself isn’t much of a threat to J&J, even less to Amgen, which sells epoietin alfa as Epogen in the US. But it is symbolic, at least in its timing, of an end to the monopolies that innovators have enjoyed on hard-to-make biologics like EPO, a topic we discussed in more detail in this IN VIVO feature.

Sandoz’s head of Biopharmaceuticals Ajaz Hussain knows that biosimilars’ take off will be slow; he told IN VIVO Blog about it earlier this summer. But take off they will, eventually—and when they do, this approval may well be looked upon, if only retrospectively, as one of the most important steps along the way.

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While You Were Running with the Bulls

That's gonna leave a mark

A few notes from the weekend that was ...

• Satisfaction Gauranteed! Can pharmaceutical firms profit with variations on the no-cure-no-pay strategy? The New York Times takes a look. Incidentally, if that sounds familiar you may have read another take on that issue on the IN VIVO Blog about six weeks ago ... and there'll be more in the next issue of IN VIVO.
  
• Accept No Substitutes! The San Francisco Chronicle reviews the pros and cons of generic biologics. Biosimilars? Biogenerics? Whatever you're calling them these days.
  
• For Refined Tastes! Tom Wolfe won't be reading this. And IN VIVO Blog thinks white suits look pretty damn silly, so we're even.


• Breaking Hearts Since 1883! The Philadelphia Phillies, favorite baseball team of a few of us at the IN VIVO Blog, lost their record 10,000th game last night, falling to the Cardinals 10-2. That ignominious milestone got us thinking ... is there a parallel in the pharmaceutical world, a company with a particularly striking blend of poor luck and staying power (and bad pitching)?

(AP Photo/ Inaki Porto)

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Congress Is Still Open to Drug Incentives

While neither of the anti-infective incentives in the Senate FDARA bill we wrote about earlier this week appears to create a niche for a blockbuster commercial product, together the incentives show that there is still room for pharma advocates to negotiate for incentives with the Democratic Congress.

That’s an important point as potential biogenerics legislation hangs around the fringes of the progressing user fee/drug safety bill (S 1082, the Food & Drug Administration Revitalization Act).

Democratic and Republican staffers involved in the follow-on biologics debate have reported good progress on the approval pathway and safety issues for follow-on biologics. They have said publicly that they expect more difficulty around the incentive discussions.

If history is any guide, the ability of the existing innovators in the biologics category (primarily Amgen, Biogen-Idec, Genentech, Genzyme and J&J) to carve out protections for their products will determine whether follow-on biologics is added as a last-minute part of the PDUFA/drug safety package this year.

That’s how Waxman-Hatch was passed in 1984 (when Pfizer and J&J cut deals to protect some of their major in-line products) and that’s what it will take to get a follow-on biologics bill this session.

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Amgen Sucks Up to Tony

"So you see, if we create jobs, you keep reimbursing our drugs, ok?"

UK Prime Minister Tony Blair at last had something to smile about at the opening of Amgen Inc.'s new R&D center in Uxbridge, west of London. The US biotech brings with it 300 new jobs, its biggest R&D investment outside of the US, and a nice boost for the UK's image as a country that fosters innovation and has, in Tony's words, a "first in class research base". (You can bet the Germans are looking on with envy, given Bayer's 3000-odd job cuts in Berlin, an unfortunate but not unexpected burp as it swallows up compatriot Schering.)

But Amgen will get plenty out of it, too. Cosying up to the government isn't a bad idea when your company's largest franchise by far (anemia, 50% of sales) is under threat from all sides, and when EU authorities are doing such an unusually fast job of ushering in cheaper biosimilars.

Having the PM's ear will help as European countries gradually implement the new regulatory pathway for follow-on biologics. It will also help as the UK government considers changes to the country's drug pricing scheme, up to now considered one of the most pharma-friendly in Europe.

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