Pharma news highlights: Eli Lilly, Abbott and more

Ed Silverman


Today’s article by monthly contributor, Ed Silverman, provides a snapshot into some of the major pharmaceutical news stories from the past four weeks.

(Continued from “Pharma news highlights: Novartis, J&amp,J, Merck and more”)

The past month may have marked the end of summer, but there was no shortage of interesting affairs in the pharmaceutical world, during what some expect to be a slower time of year. But let’s start in reverse order, given that some of the most recent developments generated a bit of controversy.

Lilly’s Alzheimer’s drug results

Consider the Eli Lilly compound for Alzheimer’s. Two months ago, the drug maker released top-line results indicating solanezumab failed to meet two primary endpoints, both cognitive and functional, in a pair of Phase III double-blind, placebo-controlled trials in patients with mild-to-moderate Alzheimer’s disease. Last week, Lilly revealed complete results indicating a pre-specified secondary analysis of pooled data yielded a 34 percent reduction in cognitive decline in patients with mild Alzheimer’s, which was statistically significant.

But there was no reduction in functional decline that was statistically significant. Moreover, Lilly had to reach for a pooled analysis in order to generate a take-away message that was positive and, not surprisingly, was seized on by the Alzheimer’s Association, among others, as encouraging news. Wall Street analysts were a bit more cautious, if somewhat optimistic, but the varying reactions underscored that the findings suggested as much hype as hope.


“Lilly must still talk to regulators about its next step, but few believe the drug maker would win approval…”


Lilly must still talk to regulators about its next step, but few believe the drug maker would win approval with the current data and, instead, is likely to have to conduct a Phase III trial with up to 2,000 patients. An undertaking of this magnitude means that the compound is unlikely to reach patients for at least four years. Just the same, Lilly shares got a bounce, if only because stockholders hold out hopes that the drug maker can still find a way to make its Alzheimer’s bet pay off and replenish its thinning pipeline.

The odds that solanezumab may become the first ‘disease modifying’ drug have risen, yet ascribing exact odds of success remains difficult,” wrote Sanford Bernstein analyst Tim Anderson in an investor note. “…In our prior reports we put the odds of technical success at 20 percent. It would not be a stretch to say that this figure has doubled to 40 percent, yet solanezumab still remains a Phase III asset where the risk is likely higher than normal.

Abbott’s CV mistake

Another flap involved an embarrassment for Abbott Laboratories. For several years, Abbott somehow misstated that a high-ranking executive named Richard Gonzalez held a bachelor’s degree in biochemistry from the University of Houston and a master’s degree in biochemistry from the University of Miami in government filings, on its website and elsewhere. Specifically, the inaccurate information was misstated in at least nine regulatory filings between 2002 and 2007, during which he was chief operating officer, among other things.

An Abbott spokeswoman explained this was an administrative error. But the explanation raised questions about when the error became known, when it was fixed and why Gonzalez, who joined Abbott in 1977 and retired in 2009 to battle throat cancer before returning the following year, failed to notice the mistakes. Imagine the countless times he was introduced at a forum or dinner where his credentials were listed? Meanwhile, Gonzalez was chosen to become CEO of the upcoming spin-off of the pharma-based research business, which will be called AbbVie.


“…typically, resumes must be closely and regularly vetted on a regularly recurring basis at the drug and device maker.”


In an effort to paper over the scandal, Abbott CEO Miles White wrote a memo to employees, in which he insisted that “Rick brought this error to the company’s attention after his retirement and prior to returning to the company in 2009. We conducted an internal and external investigation of the matter and his biography was subsequently corrected. We also discussed the matter with the board of directors prior to his selection to lead the new company. After full discussion, the board of directors concluded he is the right person to lead AbbVie.

The explanation did not soothe naysayers, including some Abbott employees, who believe Gonzalez got a pass when, typically, resumes must be closely and regularly vetted on a regularly recurring basis at the drug and device maker. Just the same, there was no further indication that the Abbott board was prepared to revisit the issue.

Another J&amp,J lawsuit

Johnson &amp, Johnson suffered another in a long string of embarrassments. The healthcare giant has been struggling to fix manufacturing problems that led to the recall of millions of products over the past three years and, more recently, has been paying settlements and fines related to the allegedly illegal marketing of its Risperdal antipsychotic. The latest imbroglio involved dozens of lawsuits in which teenage boys claim they developed male breasts after taking the pill and the first lawsuits to go to trial were quickly settled – but not before a report prepared by former FDA commissioner David Kessler skewered J&amp,J for its marketing practices.

In my opinion,” Kessler wrote as an expert witness for the boys and their lawyers, J&amp,J’s Janssen unit “promoted Risperdal for non-approved uses in violation of the Federal Food, Drug, and Cosmetic Act. The promotion of non-approved uses by a manufacturer, because it undercuts the system and safeguards of drug regulation, is concerning. The promotion of non-approved uses by a manufacturer of powerful drugs is more concerning. Janssen’s promotion of Risperdal, a powerful drug, for non-approved uses in the most vulnerable children is deeply troubling,” he concluded.


“The healthcare giant has been struggling to fix manufacturing problems that led to the recall of millions of products…”


The episode occurred shortly after J&amp,J agreed to pay $181 million to resolve claims by 36 US states for promoting Risperdal improperly. The deal included provisions that are more specific, however, than the restrictions that the US Department of Justice often imposes on drug makers, such as agreeing not to misuse continuing medical education programs for marketing or awarding grants to doctors based on their prescribing habits. One provision, in particular, though, restricts the ability of J&amp,J to use its sales and marketing teams to distribute peer-reviewed reprints of journal articles that contain off-label information, which is a significant development.

India rejects Bayer petition

The brand-name pharmaceutical industry lost a key battle in India, where the Intellectual Property Appellate Board rejected a petition from Bayer that sought to overturn an order by the Controller of Patents, which awarded a compulsory licence to Natco to make a version of the Nexavar kidney cancer drug. Natco received the first compulsory license ever to make a generic version of Bayer’s Nexavar last March and Bayer filed a challenge. The license was granted based on Bayer pricing. As a result, the Nexavar price is expected to drop from $5,500 per person each month to $175, a 97 percent decline. The drug generated $934 million in global sales in 2010, according to India’s Patent Office, which also noted, however, that Nexavar was barely sold in India and called this “neglectful”.

Under the World Trade Organization’s TRIPS Agreement, which governs trade and intellectual property rules, compulsory licenses are a legally recognized means to overcome barriers in accessing affordable medicines. Patient advocacy groups and non-governmental organizations say the decision reaffirmed that the decision is a game changer. In fact, the Chinese government recently amended its own patent laws to allow compulsory licensing, a development that some experts have attributed to recent events in India.

The next ‘Pharma news highlights’ can be viewed here.




About the author:

Ed Silverman is a prize-winning journalist who has covered the pharmaceutical industry for the past 16 years. In addition to editing Pharmalot, he is currently an editor-at-large for Med Ad News.

Previously, he was a bureau chief for The Pink Sheet, the venerable industry newsletter, and a contributor to its sister publication, In Vivo magazine. Before that, Silverman worked as a business writer for The Star-Ledger of New Jersey, one of the nation’s largest daily newspapers, where he conceived and launched Pharmalot. During his 13-year tenure, he closely followed a variety of topics of concern to those who work for, and with, drug makers – drug development, mergers and acquisitions, regulatory oversight, safety and pricing controversies, and marketing issues.

Prior to joining The Star-Ledger, Silverman spent six years at New York Newsday and previously worked at Investor’s Business Daily, among other newspapers. He has a master’s degree in journalism from New York University and a bachelor’s degree in accounting from Binghamton University. Tethered to his laptop and Blackberry, Silverman lives in suburban New Jersey with his wife, three children, a sizeable Labrador retriever and a sneaky beagle.

What do you think about this month’s pharma news?