Result? California Judge entered a $516.7 million judgment in favor of Asahi Kasei Pharma Corp. in the case Asahi Kasei Pharma Corp. v. Actelion Ltd. The total awarded to Asahi for its claims in this matter will exceed $607 million, consisting of this judgment and a $91 million International Chamber of Commerce (ICC) arbitration award that Actelion-subsidiary CoTherix, Inc. paid to Asahi in 2010. In addition, the $516 million state court judgment will now earn approximately $50 million a year in interest while Actelion appeals the decision.

It is worthwhile to be VERY diligent in drafting your License Agreements!

QUANTITY is not quite as important as QUALITY and we think that the quality of drugs approved this year could be the best in 15 years, addressing real unmet needs in melanoma, Hepatitis C, Lupus-- this is reflected in the forecasted combined peak 5th- year sales of $14.6 Billion

FDA approvals in 2011

1. Actemra (tocilizumab); Genentech; For the treatment of systemic juvenile idiopathic arthritis, Approved April 2011

2. Afinitor (everolimus); Novartis; For the treatment of advanced pancreatic neuroendocrine tumors, Approved May 2011

3. Arcapta (indacaterol maleate inhalation powder); Novartis; For the treatment of airflow obstruction resulting from chronic obstructive pulmonary disease, Approved July 2011

4. *Benlysta (belimumab); Human Genome Sciences; For the treatment of systemic lupus erythematosus, Approved March 2011

5. *Brilinta (ticagrelor); AstraZeneca; For the reduction of thrombotic events in patients with acute coronary syndrome, Approved July 2011

6. Daliresp (roflumilast); Forest Pharmaceuticals; For the treatment of chronic obstructive pulmonary disease, Approved February 2011

7. Dificid (fidaxomicin); Optimer Pharmaceuticals; For the treatment of Clostridium difficile-associated diarrhea, Approved May 2011

8. Edarbi (azilsartan medoxomil); Takeda; For the treatment of hypertension, Approved February 2011

9. Edurant (rilpivirine); Tibotec; For the treatment of HIV-1, Approved May 2011

10. Gralise (gabapentin); Abbott; For the treatment of postherpetic neuralgia, Approved February 2011

11. Horizant (gabapentin enacarbil); GlaxoSmithKline; For the treatment of restless legs syndrome, Approved April 2011

12. *Incivek (telaprevir); Vertex; For the treatment of genotype 1 chronic hepatitis C, Approved May 2011

13. laViv (azficel-T); Fibrocell Science; For the improvement of nasolabial fold wrinkles in adults, Approved June 2011

14. Lazanda (fentanyl citrate) nasal spray; Archimedes; For the management of breakthrough cancer pain, Approved June 2011

15. Makena (hydroxyprogesterone caproate injection); Hologic; For the prevention of risk of preterm birth, Approved February 2011

16. Nulojix (belatacept); Bristol-Myers Squibb; For the prevention of organ rejection following kidney transplant, Approved June 2011

17. Potiga (ezogabine); Valeant Pharmaceuticals; For the treatment of partial-onset seizures, Approved June 2011

18. Tradjenta (linagliptin); Boehringer Ingelheim; For the treatment of type II diabetes, Approved May 2011

19. Vandetanib (vandetanib); Astra Zeneca; For the treatment of thyroid cancer, Approved April 2011

20. Victrelis (boceprevir); Merck; For the treatment of chronic hepatitis C genotype 1, Approved May 2011

21. Viibryd (vilazodone hydrochloride); Clinical Data; For the treatment of major depressive disorder, Approved January 2011

22. *Xarelto (rivaroxaban); Bayer; For the prophylaxis of deep vein thrombosis during knee or hip replacement surgery, Approved July 2011

23. *Yervoy (ipilimumab); Bristol-Myers Squibb; For the treatment of metastatic melanoma, Approved March 2011

24. Zytiga (abiraterone acetate); Centocor Ortho Biotech; For the treatment of prostate cancer, Approved May 2011

*Touted as potential blockbusters

On the other side of the coin is John L. LaMattina's Aug 2011 article in Nature Reviews where he questions the impact of mergers on pharmaceutical R&amp productivity. In a nutshell, his hypothesis is more mergers, less companies and hence less drugs.

The heyday of new drug approvals by the US (FDA) were the 90s- with an average of 31 drugs per year between 1990 and 1999 compared with 24 per year between 2000 and 2009

The peak was 54 drugs approved in 1996.

Great potential - Crizotinib for lung cancer showed truly impressive results in patients whose tumors express an anaplastic lymphoma kinase (ALK) gene.

Downside - ALK is thought to be a driver in only 3 to 5 percent of the cancers.

Yet Pfizer appears non-fuzzed about the number of people that can benefit from its drug, but rather its 'personalised' efficacy.

So take note you who are intending to out-license - Pharma is going in a targeted direction for example requiring biomarker studies to better match experimental compounds with the right patients. Most promising late-stage cancer drugs are in some way targeting specific molecular drivers of tumors.

I think this will be the way things will go too - true benefit for patients, real benefit for insurers who will pay for the right therapy for the right patients, expedited review, premium pricing and probably orphan status and small sales forces / promotion for the drug.

Finally, perhaps we will worry less about the market than the efficacy-- but is this true only for highly prices onco drugs??

Apart from the obvious negative results either in efficacy or safety,

1) the conventional wisdom in drug development is that there is high value to fail fast then to fail at late, expensive stages
2) harder and harder to differentiate your product against the numerous and faster-to-market competitors
3) high costs of development, hence the unbearable high risks
4) pricing squeeze that will not allow eventual sales to bring about a ROI

Read on for more reasons...

- Pfizer and Rigel terminated an agreement for R343, an inhaled Syk inhibitor for allergic asthma.
- AZ did not exercise its option to license Targacept's TC-5619
- Sanofi withdrew from Metabolex
- GSK ended a $1 billion neurology deal with Targacept,
- Merck terminated Portola Pharmaceuticals Inc.'s CV drug betrixaban.
- Pharma's mass exodus from the RNAi space last year

Partnerships between pharma and biotech for development-stage drugs can begin any time from before screening for a molecule through Phase III development, but no matter when they start, a majority of the partnerships end in Phase II or Phase III.

According to Deloitte Recap LLC, between 1977 and the Q3 2010, 29 percent of partnered compounds were in Phase II at termination while 35 percent were in Phase III.

7 percent of partnerships dissolved after a marketing application had been filed for the drug either because regulatory agencies turned down the drug and additional clinical trials were needed or occasionally pharma simply had a change in heart.

- Abbott told Depomed Inc. that it didn't want to market Gralise (extended-release gabapentin) just weeks before the drug was approved by the FDA. Abbott received rights to the drug through its 2008 M&A of Solvay.

Pharma's reasons or excuses:

1)The most common reason for termination was reprioritization, but the 38 percent of deals that fall into that category may be misleading. "It's sometimes the terminating party being nice," Dokomajilar said. "It might be for an underlying reason, but they're not disclosing it."

2)33 percent of the deals were terminated because of a lack of efficacy or safety.

3)7 percent were due to a lack of diligence on the part of the party reponsible for conducting clinical development. Many contracts require companies to use a "commercially reasonable best effort" to advance a compound, but such vague language can increase the likelihood of cancelled partnerships. Dokomajilar contended that setting specific diligence milestones – for example getting through a certain phase by a certain time – is a clearer approach.

4)Another 7 percent were due to M&A activity. While occasionally a biotech may take back a drug because its partner was acquired, it's more often the case that the biotech gets acquired, causing the pharma to back out. "The new partner introduces different risk," Dokomajilar said.

5)Finally, 15 percent of terminations fall into an "other" category, which mostly covers buyouts of the agreement and lack of progress.

A Blessing in Disguise ?

Getting a compound back isn't the worst thing that can happen to a biotech. Of the 474 alliances in Recap's database that have been terminated, 55 percent of the drugs are still alive. And 42 percent of those have been re-partnered. So overall, a dumped drug has nearly a 1-in-4 chance of finding a new home.

-ICOS Corp. originally licensed Cialis (tadalafil) to GSK in 1991 , but the partnership was terminated in 1997 when Glaxo sought a new direction. A little more than a year later(1998), ICOS found a new partner – and eventual takeout buyer (2002) – in Eli Lilly.

- Exelixis Inc. regained rights to cabozantinib after it couldn't agree on the scope, breadth and pace of clinical development with partner BMS. Still, analysts have high hopes for the molecule being re-partnered after the company unveiled promising data in patients with prostate cancer.

- when Merck handed back rights to a midstage antibody program licensed from AVEO Pharmaceuticals Inc. – citing a shift in priorities – the biotech's stock shot up 23 percent.

- when Merck dumped Cortex Pharmaceuticals Inc.'s ampakine compounds for schizophrenia and depression. In both cases, investors were happy to have unencumbered rights and a new opportunity to re-partner a drug that Merck had already spent plenty of money advancing.

The key to being able to re-partner a drug is a clean break from the company licensing the product. Cancellation payments, a growing trend in deals, may seem like a good idea, but they often come with strings attached in the form of royalties due to the former licensee.
"Royalties owed to the licensee may cause a hit when trying to find a new partner," Dokomajilar said. "A best practice is to go for clean reversion" that "allows for a second shot on goal."

PS: Both Debiopharm's products including its blockbuster, oxaliplatin were picked up from Pharma's termination.

Picking Up the Pace

Since the beginning of the year, BioWorld Insight has tracked 13 terminated agreements between biotech and big pharma compared to eight terminations during the same period in 2010.

Dokomajilar attributed the increase to two things: volume and risk.

Pharma's appetite for licensing products has been large. Five years to 10 years ago, pharmas licensed in a lot of compounds at early stages. Dokomajilar said that's left the companies with a "large portfolio of unproven technologies."

Lately pharmas have licensed late-stage assets to fill their pipelines ahead of their patent cliffs.

For both types of deals, the moment of truth – Phase II and Phase III trials – are upon us. Some attrition is bound to happen, and an increase in deals will naturally lead to an increase in the number that fail.

Dokomajilar also thinks that pharma isn't waiting for bad news to end partnerships. With pharma in cost-cutting mode, "we're going to see more terminations and at earlier stages," he said. "It cost a lot of money to keep programs going, and there might be more value in terminating."

source- BioWorld

The whole point is that you do not want your partner to be directly competing with your product when your product still has a good life span. You get only a small fraction of the profits,usually in royalties (yes, it is fair, since your partner presumably has taken the risk and paid the lion's share of the development costs and likely came up with a regulatory, clinical and marketing strategy as well). Still-they have 'riden' on your asset and they should give it a decent run in the marketplace..and be sensitive to your business,right? When will your next product come along!?

An exception I do make is when the competing product has an indeniably superior efficacy or side-effect profile, then it would be unethical that your partner does not bring it out to benefit the patients - at the end of the day, our ultimate aim here is to progress therapeutics and to cure diseases.

Amylin Pharmaceuticals is in a legal battle with long-time Byetta partner Eli Lilly, who plans to promote a rival diabetes drug with Boehringer Ingelheim. There is no doubt that Amylin is still in business today, thanks to its Lilly partnership.

Amylin filed a lawsuit against Lilly, claiming its link-up with Boehringer is unlawful and breaches pacts covering Byetta (eventide) and its once-weekly version Bydureon. In January, Lilly signed a wide-ranging diabetes collaboration, one of the key elements being the oral dipeptidyl peptidase-4 inhibitor Tradjenta (linagliptin), which was approved in the USA earlier this month.

Amylin alleges that Lilly is engaging in "improper, unlawful and anticompetitive behaviour" as linagliptin will compete directly with the eventide products. Now a California court has issued a temporary restraining order (TRO) against Lilly, preventing it from proceeding with plans to use the same sales force to sell both exenatide and linagliptin.

Why do we, in pharma get into such situations? Why couldn't we have saved legal headaches and huge fees by :

1) Better communications and transparency at Alliance Management

2) Better top level (CEO) communications and relationships

3) Being attentive to the anti-competition clause and perhaps renegotiated it?

Again, Amylin and Lilly may have done all that and still decided to support the legal profession !

Emerging markets and generics are forecast to be the only bright spots for the global pharmaceutical market in the next five years.

Spending on medicines will continue to slow down from the 6.2% per year witnessed between 2005 and 2010 to just 3-6% in the next five years. By 2015, the world's medicines bill is expected to reach nearly $1.1 trillion, up from an estimated $856 billion in 2010 and $605 billion in 2005. Absolute growth is expected to be $210-240 billion in the five years 2011-2015, compared with $251 billion between 2006 and 2010.

The largest segment of growth in the next five years is anticipated to be the emerging markets, driven by increased access through reforms and economic growth. Indeed, emerging markets – representing 17 high growth markets led by China -- will see their share of the global drugs market rise from 18% in 2010 to 28% by 2015.

Indeed, China is likely to overhaul Japan has the world's second largest pharmaceuticals market by 2015. Over the same time period, European and US spending on pharmaceuticals is forecast to decline from 24% to 19% and 36% to 31%, respectively.

IMS is forecasting that the so-called emerging markets will see their pharmaceutical spending rise from $154 billion in 2010 to $298 billion by 2015; in 2005, IMS estimates, emerging market spending on drugs was just $73 billion, representing a 12% share of the $605 billion market. Of the total increase in spending by these markets, approximately 20% is expected to come from branded products.

Consequently, the rapid growth in emerging markets is largely from spending on generics which will contribute to the rise in the generic share of the total medicines bill. Global generics spending is expected to hit $400-430 billion by 2015, up from an estimated $234 billion in 2010 and $124 billion in 2005.

Patent expiries will reduce the spending on branded drugs by $120 billion between from 2011 through to 2015, offset partially by $22 billion of expected generic spending of the same medicines. Patents are expected to expire in one or more developed markets for 11 of the top 20 selling drugs by value. Blockbuster drugs due to be affected include Pfizer's Lipitor, Bristol-Myers Squibb's Plavix, GlaxoSmithKline's Advair Diskus, and AstraZeneca's Nexium and Seroquel. Consequently, while brands accounted for nearly two thirds of global pharmaceutical spending in 2010, as patents expire in developed markets, that share will fall to just 53% in 2015.

While it is clear that cost containment and access to medicine schemes will put a brake on drug spending growth rates, there are some areas where the industry will see more robust increases. Global biologics spending is forecast to grow from $138 billion in 2010 to $190-200 billion in 2015, representing an average annual growth rate of 6-9%. Significantly, planned new European approval guidelines, expected later this year, are expected to boost biosimilars uptake from $311 million in 2010 to up to $2.5 billion in 2015.

While specialty medicines will experience continued growth in the medium term, driven by novel mechanisms and improved efficacy, growth will decelerate in most therapy areas owing to patent expiries and the lack of significant new treatment options. Oncology will still account for the largest amount of money in a therapy area at an estimated $75-80 billion by 2015, up from $57.1 billion in 2010.

Developed markets growth slows: est. CAGR 3-6% for the next 5 years vs 6.2% in last 5 years

Why?
•US spends less
•patent expirations- spending for branded products in developed markets will remain at the same level in 2015 as in 2010.
•Market share for branded medicines drops - 70%(in 2005);64%(in 2010); 53%(in 2015)
Pharmerging Markets grow ( strong demand, govt policies)
•80 cents of every dollar spent on medicines in these markets in 2015 will be for generics.
•Pharmerging markets approach U.S. levels of spending on medicines. They will nearly double their spending on medicines, to $285-315 billion, compared with $151 billion in 2010. This will be fueled by strong economic growth and governments' commitment to expanded healthcare access.

By 2015, the pharmerging markets will become the second largest geographic segment globally in spending on medicines - surpassing EU5 and approaching U.S. levels.

Among developed markets, the U.S. will experience the largest expansion of generic spending, while Japan will continue to have the lowest share despite significant policy incentives to increase generic prescribing and dispensing.

GSK, AZ and the University of Manchester are each investing £5 million to create a new translational research center--the Manchester Collaborative Centre for Inflammation Research--which will be devoted to inflammatory diseases. They plan to recruit scientists who will devote their time to developing new therapeutics for a variety of inflammatory diseases, including COPD, rheumatoid arthritis, IBD and asthma. The new collaborative center will open later this year.

"...we believe we improve our chances of success through collaborative science..." says GSK.

"...this is a ground-breaking collaboration. The creation of the new centre is indicative of a new era of pre-competitive sharing within the pharmaceutical sector and with academic scientists, to bring our learning together to ensure the faster delivery of effective medicines to patients..." says AZ.

Sanofi's Zerhouni was recruited to head R&amp from NIH and thought that the biotech model was the solution to Sanofi's R&amp woes. Now he thinks differently and is in favor of "open innovation" environment.

Translational research--the leap from bench to bedside has become harder. That requires scientists to get out of Sanofi's R&amp silo and out in the world, working with university based research teams and getting into the field with doctors to get a more real-world look at the experimental drugs needed to treat patients. Sanofi had inked academic collaborations with UCSF, Harvard and a host of others.

Sanofi has chopped its total number of development projects in half so it could better focus on its best prospects.

Partnerships between Big Pharma companies breaking down research silos and academic institutions avid to do more collaborative work are all the rage these days. And there's plenty of evidence that this trend is continuing to gain steam.