Pullan’s Pieces
Business and Science for BD & others
#69, March 2012
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Big trends of 2011– VC funds and series A both UP, IPOs raise less money.
OnBioVC reports that VC funds for biotech were up in 2011 compared to 2010, with the total bouncing around a fairly flat trend over the years. In the 4th Quarter of 2011, series A rounds were way up, totaling $483M versus $138M for the 4th Quarter of 2010. And the size of the average A round in the 4th Quarter was up to $13.1M from $8.6M, while for the year as a whole, the later rounds E and F were up compared to 2010. http://freepdfhosting.com/ef718d6d76.pdf
The top 5 biotech IPOs of 2011 raised an average of $85M compared to $200M for the top 5 of 2000. If you invested in all 17 biotech IPOs of 2011, you would have lost about 27% according to a quote of Steve Burill. Clovis, the top IPO of 2011, raised $130M with a mid-stage clinical pipeline and a team coming off the success of Pharmion. http://the-scientist.com/2012/03/01/braving-the-ipo-drought/
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Austerity means continued government pressure on drug prices
With economic pressures, governments are cutting their spending by cutting drug prices. In the last year, pharmaceutical sales to pharmacies and hospitals declined 2.2 percent in France, 3.1 percent in Italy and nearly 9 percent in Spain. As countries in the troubled Euro zone lower the prices they pay for pills, other governments (Italy, Germany, Spain, and Portugal) that use “cross-referencing” to calculate their prices from those paid by other countries, will also lower theirs. http://www.nytimes.com/2012/02/24/business/austerity-in-europe-puts-pressure-on-drug-companies.html?pagewanted=1&_r=1. Greece just passed a mandate to limit spending on drugs by state pension funds and mandate generic drugs prescriptions as a way to cut costs. Generic use has been a low 18% of the market versus an average of 50% in Europe. http://mobile.reuters.com/article/idUSL5E8DT8IY20120301?irpc=932
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AstraZeneca sues FDA over Seroquel generic labels
How could I not mention this? I worked as team leader on the Seroquel research project when I was at Zeneca. Now, AstraZeneca is seeking an injunction to prevent the FDA from permitting generics until a court rules on the legality of not requiring the generics to have the same warnings on the label as for Seroquel. In this case, the some of the data supporting the warning on hypoglycemia and suicidal thoughts are based on the extended release form of Seroquel, which has patent protection to 2017, so that data would not be available for the generic companies for some time. http://online.wsj.com/article/SB10001424052702304537904577278863071975138.html?KEYWORDS=astrazeneca+sues+FDA http://www.fdalawblog.net/
Interestingly, a Supreme Court decision last June that said generic companies can’t be sued for inadequate warnings as the content of the warning labels are the responsibility of the owner of the branded drug and the FDA. http://www.csmonitor.com/Business/Latest-News-Wires/2011/0624/Drug-labels-Generics-don-t-need-warning-updates http://www.medpagetoday.com/PublicHealthPolicy/FDAGeneral/31630
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Oncology Deal-Making panels say “good licensing opportunities scarce and valuable”
The biggest message for me at the recent GTC meeting on Oncology Deal Making was the emphatic view that good licensing opportunities are scarce and can command lots of deal value and terms flexibility from pharma partners. But at the same time, the definition of “good” licensing opportunities is higher than ever before. Out-licensors are asked to really demonstrate the value of the drug candidate early and robustly. The more novel the opportunity, the more work that needs to be done to establish its future role in the market place.
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See you at the next meeting?
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Linda Pullan
4400 Paseo Santa Rosa, Newbury Park, CA 91320
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