Dicerna Announces Series A, Nastech Announces Spin-Out of MDRNA

As we wrote about two weeks ago here, the new RNAi play Dicerna has closed its Series A, which was led by Oxford Bioscience Partners with participation from Skyline Ventures (which coincidentally concluded its own fundraising recently, which it announced today and VentureBeat reports on here). As anticipated, Dicerna brought in $13 million to advance its dicer-substrate RNAi projects. The full description of the Dicerna deal and its IP and technology is available in this month's Start-Up.

And, as we also pointed out back on Hallowe'en, Dicerna's IP, licensed exclusively from City of Hope, is nevertheless not quite 'exclusive.' Nastech Pharmaceutical coincidentally said yesterday--and elaborated on in a conference call today--that it would be spinning out its own RNA interference assets, also built around a license to that same Rossi/Behlke IP, into a newco called MDRNA Inc.

Nastech chairman/pres/CEO Steven Quay, MD, PhD, said on today's conference call that the current plan was to seek a private investment in MDRNA from institutional investors or VCs, followed by a Nasdaq listing for the firm.

Beyond the company's core IP and ongoing RNAi programs at Nastech that will be transferred to the newco, relatively little is known about MDRNA. Quay offered no details on who will manage the company, who will advise it and who will comprise the board--though "the boards are being built as we speak," he said.

Nastech's hard luck, (most recently) dominated by the decision of partner Procter and Gamble to give up on the companies' nasal-delivery osteoporosis project and documented here by the WSJ's Health Blog, has led to predictable restructuring. That restructuring--also announced last night and discussed today on Nastech's call--either forced the company's hand in disclosure of the spin-out or perhaps more likely led to the decision to offload the assets in the first place, which will save the company $20 million in 2008 and shift approx 40 of its employees (70 positions are targeted in the restructuring).

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Musical Chairs at Novartis, Except When the Music Stops, 1250 Fewer Chairs

Novartis posted its third quarter results this morning and missed its profit guidance. Genericization, delays to Galvus, and the withdrawal of Zelnorm all contributed to a 12% decline in earnings. And so out comes the axe. Oddly enough, the press release was titled "Novartis delivers record earnings in first nine months of 2007 thanks to strong operational performance and divestment gains." Is it time to revive IN VIVO Blog's 'press release of the week' feature?

Novartis is cutting 1250 jobs (mostly in sales, and including 510 'third-party' sales positions) in the US, a move cheered by analysts and expected to result in savings of about $230 million in 2008. The layoffs are part of a restructuring of its pharma development and commercialization organization.

Most conspicuously Thomas Ebeling, the current head of pharma, will be shuffled over to Novartis' consumer business--a position perhaps more suited to his background: he came to Novartis from Pepsi a decade ago. At pharma he'll be replaced by American Joe Jimenez, the current head of the consumer business who joined Novartis earlier this year (and was until 2006 European president and CEO of the food giant Heinz), effective immediately, "to expand management experience and provide fresh impetus." That might be a new euphemism, we're not sure.

Less surprisingly, the company is also establishing Novartis Biologics "as a focused unit to accelerate and optimize the potential of research and development of innovative biologic medicines." We've noted before (and discuss at length here) certain pharma's need to bulk up in large molecules. Novartis says:

This unit will unify and expand the expertise within Novartis by bringing together the key elements necessary for fast and high-quality R&D activities and to help attract top talent. Biologics comprise 25% of the pre-clinical research pipeline at Novartis and are increasingly a priority in R&D activities.

It will be interesting to see whether Novartis feels the need to augment its internal biologics capabilities with the kind of external moves being pondered by Sanofi-Aventis and Pfizer. The company has inked some 22 deals in large molecules over the past five years and most impressively has bulked up in vaccines (through the full acquisition of Chiron) and in RNAi, though a first-mover deal with Alnylam.

But back to the layoffs for a moment. Novartis' cutbacks don't approach the level of some of the other Big Pharma that have cut back this year--see the chart below from the September issue of IN VIVO--and will mainly be executed by not filling vacant positions, the company says.

Nevertheless, can the decision be seen in the broader context of the general shrinkage of Big Pharma sales forces, thanks to a variety of factors including but not limited to the rise of biologics and a shift toward specialist medicines? Which brings us back to the pharma/consumer reshuffle; both execs' backgrounds are more grounded in consumer marketing than pharmaceuticals. To say the least appointing Jimenez to the pharma post goes against the grain of the specialist marketing trend.

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Sometimes the Bayer Gets You

It has been on the cards for some time--and some cuts have already been implemented, for sure--but Bayer has made its restructuring official: 6100 jobs have been eliminated at the German specialty pharma company, which ought to go a long way towards its goal of €700 million in savings by 2009.

Most of the jobs lost come from Europe (3150) and the majority of which will be administrative redundancies in Germany, the direct result of Bayer's €17 billion takeover of Schering AG last year.

And surely it all makes sense. But what's more important in the long run is where is Bayer going from here. The company has more boldly than most larger pharmaceutical companies embraced specialist medicines as the way forward--it didn't have much of a choice, really. The move seems to be paying off; progress may or may not be confirmed when Bayer talks up its R&D strategy at the end of the second quarter.

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Abbott Joins In: Sales Force too Kos-tly

The conversation over at Cafepharma is even more colorful than usual these days in the wake of news that Abbott is slashing 20% of its newly enlarged pharmaceutical sales force.

After it's $3.7 billion acquisition of Kos we expected Abbott to reduce headcount in sales--much the same way Lilly had little need for Icos' extra infrastructure after it acquired the company last year. Expect more companies to follow suit, as Big Pharma bulk up fading pipelines via acquisition of specialty pharmaceutical companies, or smaller companies with specialty pharma assets.

Shire nipped a potentially similar problem in the bud when it bought New River. Had the companies moved forward with their co-promotion agreement on Vyvanse (New River had previously opted in to this portion of the companies' deal), Shire would have found itself footing the bill for New River's 25% contribution to the cause.

Meanwhile, Abbott's axe falls this Wednesday.

First flagged up at Pharmalot

UPDATE: The AP is reporting that Abbott will also shed 200 jobs in R&D:

The majority of the 200 scientists and researchers to be cut will come from the company's offices in northern Illinois, Abbott spokesman Scott Stoffel said Monday night. The bulk will come from a research unit that deals with the early discovery of treatments for metabolic disorders such as obesity and diabetes, he said.

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