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http://drugdiscoverynews.com/blog/

We interrupt this program…

No post of substance today, as we’re getting ready to shift over to a new blog format and a new URL for the blog. The folks involved in all the technical aspects of that transferred over the most recent posts to the new location, so it’s probably in my best interests not to go posting more original stuff here that they’ll have to move over there.

I’ll post a final update at this location with the new URL as soon as I’m confident everything is ready to go, which should be sometime Wednesday or Thursday of this week.

Earning your way

According to Dow Jones Newswires, Eli Lilly & Co. is now basing employee bonuses partly on advances in its drug research pipeline, a change that the company disclosed in a filing Friday with the Securities and Exchange Commission recently. In other pay-related news, the company also said the value of total compensation for CEO John Lechleiter went down to $16.5 million for 2010, a 21 percent drop from his 2009 pay. (Reportedly, this was at Lechleiter’s request, made for the second year in a row, due to Lilly’s business challenges.)

Lilly sees the experimental drug pipeline as its key to growth, as well it should considering it’s a Big Pharma company. And this is clearly a move in line with that notion, to encourage advancement toward market approval of its potential therapeutics. Reportedly, most Lilly employees are eligible for cash bonuses, and a smaller pool (including managers) are also eligible to receive equity-based bonuses.

Previously, Lilly’s employee cash bonuses were based primarily on how Lilly’s financial performance measured up against competitors. Now, in addition to the research-based element, cash bonuses will be based on whether Lilly meets internal goals for financial performance, and the peer-group comparison will be dropped.

It will be interested to see in the coming years (assuming results are visible before I exit the business of covering pharma and biotech news) how well this plays out and how effective it will be.

But it is an intriguing way of not only encouraging people to get workable products out there, but no doubt to also encourage them to stay with the company in a more long-run fashion.

The news also put me in mind of the GSK R&D Day in Boston that I attended in late 2010. Much of the talk from GSK execs of various types to us media folks was about new ways to do discovery and development, with unique corporate-academic partnership structures, risk-sharing deals with up-and-coming biotechs and other such innovations.

Clearly, the big boys and girls of pharma are not only recognizing that things have changed, but are trying to morph themselves in accordance with those changes. It’s good to see that companies that have traditionally been too keen on remaining…well, traditional…are trying to move outside the normal boxes.

Question is, will their efforts work? I hope it’s not too little, too late and instead will be a “Just in time” set of solutions.

The somewhat golden state

The California economy has been a wreck in recent years (not that they’re alone in that regard; simply so big in terms of GDP and such that their failings are so much more noticeable), but there are some rays of light from the biomedical sector, according to PricewaterhouseCoopers (PwC). As the firm notes:

The 2011 California Biomedical Industry Report analyzes job growth, wages, tax revenues, product manufacturing, and venture capital funding, and serves as a barometer for biomedical centers across the Unites States.

PwC reports that many CEOs from California’s largest biomedical companies are planning to increase jobs, manufacturing, and research and development operations within California. While the state maintains its industry dominance, other regions are quickly catching up and are expected to replicate the unique “ecosystem” favoring biomedical innovation within just 5 years.

Here are some highlights:

• 68% said they expected to expand the overall size of their workforce within California, while only 31 percent planned to increase workforce levels outside the state.
• While relocating out of state was not a strategy cited by CEOs surveyed, when asked about the most attractive U.S. biomedical markets outside California, 76% named Greater Boston followed distantly by North Carolina (31%), Minneapolis-St. Paul (25%) and the Washington-DC corridor (20%).
• 84% of respondents believe that the FDA regulatory approval process has slowed the growth of their organizations.
• More than three-quarters of respondents predict that the cumulative impact of changes in the healthcare marketplace, driven largely by health reform, will decrease their profit margins and 54 percent believe that the pace of innovation will slow.

For the full report, click here.

About PwC’s Pharmaceutical and Life Sciences Industry Group

PricewaterhouseCoopers Pharmaceutical and Life Sciences Industry Group (www.pwc.com/pharma or http://www.pwc.com/medtech) provides assurance, tax and advisory services to proprietary, generic and specialty drug manufacturers, medical device and instrumentation suppliers, biotechnology companies, wholesalers, pharmacy benefit managers, contract research organizations, and industry associations. The firm is dedicated to delivering effective solutions to the complex strategic, operational, and financial challenges facing pharmaceutical, biotechnology and medical device companies. Follow PwC Health Industries at http://twitter.com/PwCHealth.

Third time’s a charm for patent reform?

So, for the third consecutive session of the U.S. Congress, Sen. Patrick Leahy (D-Vt.), the chairman of the Senate Judiciary Committee, has introduced patent reform legislation, along with former committee chairman Sen. Orrin Hatch (R-Utah) and other senators [notably: Jeff Sessions (R-Ala.), the committee’s ranking Republican, and fellow senators Chuck Schumer (D-N.Y.), Jon Kyl (R-Ariz.) and Ted Kaufman (D-Del.)].

It’s legislation that, if passed, would affect more than just pharmas and biotechs, obviously, but certainly those types of companies are among the ones who most rely on patent protections to keep themselves going. Here’s what the Pharmaceutical Research and Manufacturers of America (PhRMA) has to say about the proposed reform, by way of PhRMA Senior Vice President Wes Metheny:

“Senator Leahy’s patent reform bill would strengthen the patent system while protecting patent owners and maintaining incentives for innovation. The bill balances the diverse interests of various stakeholders across American business sectors while maintaining strong and reliable intellectual property protection. A strong patent system is crucial to America’s economic competitiveness and our global leadership in medical innovation, especially in these economically trying times.

“The U.S.patent system provides American businesses with incentives that drive innovation and create jobs across the country. By creating a positive environment for innovative R&D, the patent system encourages the development of ideas into life-changing products and further encourages the ideas of the future.

“This couldn’t be more true than in the biopharmaceutical research sector. In a field where the development of an average new medicine can take 10-15 years and cost more than $1.3 billion, the incentives provided by intellectual property play a key role in encouraging this costly – and risky – investment.

“In the end, the benefits are great. Life expectancy is at an all-time high and previously life-threatening diseases are now viewed as controllable conditions, largely on the strength of the innovative R&D taking place through America’s biopharmaceutical sector. Meanwhile, the sector – one of the most research-intensive in the world – employs more than 650,000 direct biopharmaceutical workers and supports a total of more than 3 million jobs.

“America’s biopharmaceutical research companies have a real and significant effect on healthcare and on the economy. This just wouldn’t be true without a reliable and predictable patent system.

“Senator Leahy’s bill – and the support of its cosponsors – demonstrates their appreciation for the importance of intellectual property protection to the U.S. economy and to the jobs – and life-saving innovation – that it provides.”

“With this agreement, we are closer than ever to advancing patent reform legislation through the Senate,” said Leahy in a prepared statement Feb. 3. “Senator Hatch and I have worked through many Congresses to make meaningful reforms to the nation’s patent system, and I appreciate his commitment to this effort. This compromise may not be everything that everyone wants, but it makes important reforms to the outdated patent system. Strengthening American patents will improve the quality of our inventions and innovations, which will translate into jobs and economic growth in Vermont and across the country. Congress is committed to strengthening our economy, and the Patent Reform Act is an important component of that effort. I hope the leaders will soon schedule floor time for this important legislation.”

Snip, snip, snip…

Well, seems another round of layoff is coming. Wonder which other Big Pharma types we’ll hear are laying off thousands, reorganizing, etc.? All these stories hit the wires in just the past day or two.

Pfizer Inc. to close UK research site

BBC News — Pharmaceuticals group Pfizer is to close its research and development (R&D) facility in Kent, which employs 2,400 people.

Pfizer Inc. to lay off 1,100 in Connecticut

UPI — U.S. pharmaceutical giant Pfizer said Tuesday it would lay off 1,100 workers from its Groton, Conn., campus as part of a cost-cutting program.

(Though in the “good news” category, the company is adding 350 Jobs in Massachusetts)

Bayer HealthCare Pharmaceuticals streamlines healthcare operations

Pharma Times — Bayer is putting in place measures which it claims will cut down on administration and promote innovation. The German group’s pharmaceutical business, previously Bayer Schering Pharma, will operate as a division called Bayer HealthCare Pharmaceuticals under the leadership of Andreas Fibig, and its headquarters will remain in Berlin.

(Whenever I hear the word “steamline,” I figure it will soon be followed by “layoff” or “rightsizing”)

Genzyme and sanofi-aventis are getting closer

The folks at Bloomberg and the Wall Street Journal have their “inside sources” (I was never good at espionage), so we’ll let them tell you what’s going on with the continuing saga of sanofi-aventis trying to acquire a (so far) reluctant Genzyme.

Bloomberg:

Genzyme Corp. agreed to give Sanofi-Aventis SA access to confidential information, bringing the companies a step closer to a deal five months after the French drugmaker offered to buy Genzyme for $18.5 billion.

The companies may reach a deal in the next two weeks, said three people with knowledge of the situation who spoke on the condition of anonymity because the talks are private. The confidentiality pact means that Sanofi and Genzyme are aligned on broad terms, with Sanofi likely to slightly raise its $69-a- share offer, the people said. The French drugmaker may also make additional payments based on the success of a Genzyme experimental multiple sclerosis drug, the people said. The companies have yet to agree on final terms.

Wall Street Journal blog:

It Might Actually Happen: Genzyme and Sanofi-Aventis have agreed in principle to a deal and plan to nail down the details in the next week, though there is still no guarantee of a final agreement, the WSJ reports, citing people familiar with the situation. Genzyme has previously rejected Sanofi’s $69-per-share offer as too low and instead wanted something more like $80 to sell, but recently “the two sides have made significant progress in bridging the value gap,” the paper says.

Eisai invests $200 million in U.S. personalized medicine unit

Seems that Japanese company  Eisai has put together a biotech start-up in the United States by the name of H3 Biomedecines, intended to focus on discovering and developing next-generation cancer drugs and with an aim to generate new treatments “aimed at fulfilling the promise of personalised cancer medicine.”

H3, based in Cambridge, Mass., will be wholly owned by Eisai, which has committed to putting up $200 million in research funding. Eisai officials say the establishment of H3 is distinct from similar companies because it will have the “resources and capabilities of an established pharmaceutical company, while also encouraging and rewarding innovative and entrepreneurial spirit.”

Eisai also that its involvement will allow H3 to benefit from a longer-term view of its drug discovery activities compared to most venture-backed start-up companies.

Saying “no” to snow

In all my years of journalism, most of which has been at medical associations, healthcare organizations, health advocacy non-profits or a pharmaceutical business publication (that last one would be ddn, of course), I’ve covered a lot of conventions, conferences and shows. Some of them I’ve actually attended and some of them I’ve only written pre-show coverage for.

But I have to say that since entering this world of reporting and editing as a paid professional around 1992, I think that I’ve only encountered one major conference that was ever held in winter at anyplace with snow, and that was at Colorado Springs, which had skiing and upscale shops to make it a major draw for convention attendees.

Folks, where’s the love for New England in late January with the possibility of ice storms or Chicago in early February, with bone-chilling winds coming off Lake Michigan?

I know, I’m a pipe dreamer.

Also, I know this is kind of a throwaway post, but it’s been a long week and I promised a post every weekday (for as long as my New Year’s resolution resolve hold out), so that’s what I’ve got today.

Have a great weekend!

PhRMA’s take on the State of the Union

Washington, D.C.—Pharmaceutical Research and Manufacturers of America (PhRMA) President and CEO John J. Castellani released the following statement after President Barack Obama’s State of the Union address:

“We commend the President for offering an ambitious agenda that focuses on bolstering the economy, job growth and strengthening our education system to ensure that we attract and retain the world’s best and brightest talent.

“While innovation and American competitiveness were also central themes in the President’s address, we believe that medical innovation specifically will continue to play a crucial role in advancing patient health and spurring economic growth in the U.S. The President recognized this crucial point tonight, as he stressed the need for investments in biomedical research. The good news is that this important research is already taking place—with more than $65 billion invested in R&D by the biopharmaceutical industry in 2009 alone.

“There is no doubt that innovation is a critical building block for growing the U.S. economy. For this reason, it is important that the Administration and Congress view the biopharmaceutical research sector—one of the most innovative, technology-driven sectors in America—as a national health and economic asset. Our global leadership in medical progress, and the domestic jobs and economic output that goes along with it, is ours to lose if our nation’s leaders don’t support policies that help preserve and nurture future medical innovation.

“We will continue to work with the Administration and members of Congress, on both sides of the aisle, on bipartisan solutions that can help spur growth in the U.S. economy, preserve timely patient access to new medicines, maintain market-based competition and foster future development of life-enhancing and life-saving treatments.”