Although Omontys is not a biosimilar, the unexpected postmarketing reports of serious hypersensitivity reactions linked to the erythropoiesis-stimulating agent (ESA) served as a reminder of the variability of biologics, their sensitivity to minute manufacturing changes and the difficulty of catching a rare safety signal in the full-blown biologic development process – let alone an abbreviated biosimilar path. It also evoked memories of a similar incident a number of years ago in which an increase in pure red-cell aplasia linked to Eprex, another ESA, was attributed to a change in rubber stoppers in the drug vials.

Both incidents should give the FDA pause about its approach to biosimilar approval. Because of the variability of biologics, biotechs and patient advocacy groups have urged the agency to require safety data for biosimilars. While the agency maintains that patient safety is its primary concern with any drug, it insists that since the reference biologic has demonstrated safety and efficacy, all a biosimilar must do is demonstrate similarity to the reference drug. The goal is not to require redundant clinical trials that would be expensive, unnecessary and unethical, according to the agency.

In light of the Omontys and Eprex recalls, the FDA, at the least, should require that marketed biologics and biosimilars have packaging identical to that used in clinical trials and be manufactured at the same facility, under the same processes, as that of the trial drug.

Neither the FDA nor most biotechs want the biosimilar path to fail. But they understand the complexities of making biologics, and they know that one disaster now could doom or indefinitely delay the new approval path.

Unfortunately, people not so familiar with the differences between biologics and small molecule drugs, which are far less complex than biologics, too often equate biosimilars with generics. Since generics are unquestionably accepted as equivalent to small molecule reference drugs, they can be substituted automatically for the brand drug at the pharmacy. Thus, they account for about 80 percent of the prescription drugs dispensed in the U.S. Many generics advocates envision the same success for biosimilars – if the FDA would just start approving them.

Yet even generics have had equivalency problems. Last year, the FDA found that a generic bupropion, approved based on extrapolated data, wasn’t comparable to GlaxoSmithKline plc’s antidepressant Wellbutrin XL 300 mg (bupropion). That incident raised questions about the use of extrapolated data for both generics and biosimilars.

Other generic equivalency issues were raised last year in a Government Accountability Office (GAO) report, which questioned the substitution of generics for some indications. The GAO cited a study that found patients on selective serotonin reuptake inhibitors (SSRIs) who switched to cheaper substitutes mid-treatment averaged $881 more in total health care costs than those who stayed on the more expensive brand SSRI due to a higher rate of hospitalizations and emergency room visits.

Another study referenced in the GAO report looked at the annual health care costs for kidney transplant patients treated with narrow therapeutic index immunosuppressants. Researchers found that patients on the generic needed higher doses of the drug or an additional immunosuppressant to maintain their new kidneys as compared with those on the brand drug.

Such issues could be magnified for biosimilars, given all that scientists don’t know yet about biologics. That, coupled with the public’s tendency to consider biosimilars as just more generics, should set off other alarms for makers of reference biologics. Some courts – most recently, the Alabama Supreme Court – have held brand drugmakers liable for adverse events caused by generics, which share the same labeling as the brand drug. Recognizing all that can go wrong in the manufacture of a biologic, makers of a reference biologic don’t want to be on the legal hook for a biosimilar that a judge or jury mistakenly equates with a generic.

Editor’s note: Need more information about biosimilars? Check out The Biosimilars Game: A Scorecard for Opportunities, Threats and Critical Strategies, a new report by BioWorld Data. Call for details (800) 477-6307.

The article “Biotech Firms, Billions at Risk, Lobby States to Limit Generics” slams biotechs for encouraging states to adopt legislation limiting the automatic substitution of biosimilars, which the Times repeatedly called “generics.” As BioWorld Today reported, most of the bills being considered by states would require physician notification of what was substituted, enhanced recordkeeping and an opportunity for doctors (and, in some states, patients) to decline a substitute. They also would restrict automatic substitution to interchangeable biologics.

The recommendations are not out of line. When prescribing a small-molecule drug, doctors can specify no generics. Why should it be any different with biosimilars? The FDA, after all, has made it clear that biosimilars are NOT generics. Although highly similar to a reference biologic, biosimilars are not always interchangeable.

For one thing, biosimilars may have minor differences from the reference biologic, so they may not be approved for all the indications of the originator drug. They shouldn’t be used off-label for those unapproved indications, Sherman said. Her worst nightmare would be for a formulary, seeing a big price difference, to treat biosimilars as it would a generic and switch everyone from the reference biologic to the biosimilar, regardless of the indication.

To be deemed interchangeable, and thus eligible for automatic substitution, under the unique two-sided approach laid out by Congress, a follow-on biologic (FOB) must demonstrate biosimilarity and then interchangeability, which means it produces the same clinical results as the reference drug in any given patient. While the FDA has yet to draft guidance on interchangeability, it has said switching trials will be necessary. The questions of how many, how extensive and how long must still be answered.

As part of its challenge in educating the public, the FDA will need to make it crystal clear which biosimilars are interchangeable and which indications have been approved for a specific biosimilar, Sherman said. The agency’s challenge is heightened by groups wanting to rush the regulatory process, so they can realize what they expect to be big savings. (In reality, biosimilars are likely to offer a 20 percent to 30 percent savings rather than the 50 percent to 90 percent discount seen with generics.)

Among regulators, the newness of the biosimilar field has led to a cautious, go-slow approach in the U.S. and other markets. Recognizing the potential to increase access to biologics, regulators want to avoid a disaster that could cancel the game.

Thus, Japan requires doctors to submit biweekly reports for every patient receiving a biosimilar for the first six months following approval. And in India, biosimilar sponsors must submit periodic safety update reports every six months for the first two years and then once a year for the following two years.

While the FDA can’t require physicians to submit reports, it is concerned about safety. Biosimilar data packets won’t reveal very rare signals, Sherman noted, so pharmacovigilance will be needed. “Patient safety is our paramount concern,” she said. When an adverse event occurs, the agency needs to know which product caused the problem.

That’s where the states come in. Since they regulate pharmacy licensing within their borders, a state can require pharmacies to notify physicians when a substitution has been made and keep records of the FOB that was dispensed. It’s all about safety.

The Times suggested that Amgen Inc. and Genentech Inc. are pushing for the state legislation – not because of safety concerns – but to protect their brand biologics from competition. What the article ignored is that Amgen, at least, is developing a biosimilar pipeline along with its partner Actavis Inc. And the Thousand Oaks, Calif., biotech has been successfully competing with numerous biosimilars in Europe and other countries for several years.

Editor’s note: Need more information about biosimilars? Check out The Biosimilars Game: A Scorecard for Opportunities, Threats and Critical Strategies, a new report by BioWorld Data. Call for details (800) 477-6307.

Even though I’ve been covering biosimilars for BioWorld for a few years now, I was surprised at the impact these follow-on biologics (FOBs) are having throughout the world, given that the European Union (EU) is continuing its two-year approval slump and no biosimilar candidates have stepped up to bat yet in Canada or the U.S.

Some of my surprise undoubtedly stems from a lifetime of watching the home teams play. With that caveat in mind, I’ll share a few of the stats that had me doing a bit of a double-take:

• The number of EU and U.S. clinical trials for biosimilars being conducted by foreign companies that have never played in highly regulated markets before;
• That Malaysia adopted a biosimilar regulatory path, based on that of the EU, a year before the World Health Organization released its guidelines and nearly two years before Congress cleared the way for a U.S. path. But countries like China, Israel and Russia have yet to draft a biosimilar rulebook;
• That Australia, Brazil, Japan, Malaysia and South Korea have all approved at least one official biosimilar, while the FDA is still waiting for its first application. In all fairness, most of these countries had their regulatory path in place at least a year before the FDA had the authority to lay out its ground rules. However, Brazil, which has approved two biosimilars since 2010, got into the game the same year as the FDA;
• The emergence of the MENA region (the Middle East and North Africa) as a growing market for biosimilars and other drugs;
• That Cuba is a major dealmaker and biosimilar partner in several emerging markets;
• The diversity of the players, especially since some of the most ambitious ones on the global field are not the major league biopharma teams. For instance, Geneva-based BioXpress Therapeutics SA is working on a pipeline of 18 biosimilars, including 16 monoclonal antibodies (MAbs), and Sapporo, Japan’s Gene Techno Science Co. Ltd. has nine biosimilars in development, including six MAbs, plus a biosimilar filgrastim awaiting Japanese approval;
• The position biosimilars and other FOBs play in helping many emerging markets break into the biologics field. That’s especially true in South Korea, which is looking to become a world leader in biosimilar development. Thanks to a package of financial and institutional aids for biologic testing and production facilities it provided a few years ago, the South Korean government expects that, by 2015, the country’s new biosimilar sector will have created 120,000 jobs, contributed $2 billion to the gross domestic product and generated $1 billion in exports. By 2020, South Korea predicts biosimilars made in that country will account for more than one-fifth of the global market.

Another statistic that caught my attention is the sheer number of biosimilars being developed worldwide. As of December, the FDA had received 50 requests for initial biosimilar discussion meetings, referencing a total of 12 biologics. But globally, more than 276 biosimilars are in the pipeline, referencing 19 MAbs, as well as other biologics such as epoetin, etanercept, filgrastim, insulin and interferon. (That’s not counting all the companies that haven’t fully disclosed their pipelines.)

In other words, while biosimilars may still be in the sandlot in the U.S., they’re already headed toward a world series elsewhere.

The musical’s stars are two enterprising performers who collaborate to navigate the pratfalls of show business, while performing an altruistic mission; whereas pharma and biotech are two enterprising industries that work in partnership to . . . well, you get the analogy. If not, try these Broadway-to-biopharma correlations on for size:

Death of a Salesman is called to mind, considering the demise of pharma sales reps clutching on to the clinical value proposition, rather than the reimbursement value proposition.

The biggest pharma, aka “The Lion King,” Pfizer Inc. is pulling out all the stops with its Lipitor extended run playbill that employs stage tricks such as co-pays, rebates, discounts and mailing direct to customers. If successful – patent cliff be damned (Yankees) – the New York-based pharma could keep Lipitor running in revival longer than “A Streetcar Named Desire.”

China is leading a BRIC ensemble staging of “How to Succeed in Business Without Really Trying,” as there is no shortage of Western producers willing to supply the talent and innovation to create biopharma’s next round of wicked blockbusters.

The curtain is going up on a real-life “West (coast) Side Story,” as “A Chorus Line” of pharmas are gearing up to fight like the Sharks and the Jets over San Diego-based Amylin Pharmaceuticals Inc. And Human Genome Sciences Inc. (HSGI) isn’t falling for the song and dance that GlaxoSmithKline plc is putting on either, as the biotech has put itself on the marquee for sale, hoping to secure an M&A exit-stage-left by drawing more than the $13 per share offer that HSGI is offering.

It seems that anything goes in biopharma, including the possibility that the White House – and regulatory edicts – could fall under the auspices of the “Book of Mormon” in November, but whatever happens, count on BioWorld to deliver the newsies.

President Barack Obama still has a glimmer of hope for preserving his Affordable Health Care for Americans Act and even if that is struck down, he can still overcome his supreme pranking with a wily November trick-up-his-sleeve snappy comeback. And Illumina Inc.’s stockholders continue to resist drinking Roche’s undervalued Kool-Aid unless they add more sugar to sweeten to Illumina’s taste. So, to the would-be biosimilars drugmakers – with no prospect of launching a biosimilars market for yet another year – April Fools’ greetings: you are the winners!

U.S.-based drugmakers hoping to produce biosimilar therapeutics were fooled into thinking they could be in the bio-follow-on business in 2012, but lo and behold, they are only one year deeper into a potentially years-long wait for a plan to actually be implemented that would allow for sales to commence. The joke’s on them – again!

After more than a decade and counting, the brand makers are still the masters of pranking.

It’s Not Rocket Science – It’s Even More Complex:

It’s Biosimilars!

Biotech has finally met its match. After revolutionizing drug development; after staring down unmet and underserved diseases; after outlasting the raging economy; after overtaking pharma in the clinic; after towing the FDA into the 21st century, the superbio-market has met its Kryptonite. Evidently, biosimilar production is just too complicated for the innovative industry in the U.S.

Doctors want them, patients demand them, the Obama administration mandates them, pharmacies fancy them and insurers covet them.

But the market pathway is apparently unsolvable, at least in the U.S. It’s War and Peace mixed with quantum physics, written in Yiddish and with the audio book narrated by the Fran Capo, the world’s fastest talking woman!

Don’t mess with the brand lobby. They may not yet be as adept as the oil lobby is in keeping the biofuels market down to fumes and fuming for a century, but they’re off to a good start. It has been more than a decade since this endeavor began in bright-eyed earnest and the brand-makers are still enjoying unchallenged market access to their exclusive reigns by perpetuating the work-in-progress status of biosimilars in its largest market country.

Biosimilar legislation was passed in the European Union (EU) in 2005 and since 2006 there have been 18 biosimilars approvals by that agency. Why, just a year between legislation and production – can you believe such impetuousness? Why, millions must be dying from recklessly putting such sketchily investigated drugs on the market!

For Puck’s sake, there is a template! By 2009, at least 15 countries, the EU and the World Health Organization had drafted final biosimilar guidelines ahead of the U.S. Canada, not exactly known for being cocksure, approved its first biosimilar (Omnitorpe) in 2009 – wait for it – in advance of final guidance for the regulatory pathway. That decision was based on its regulators’ assessment that they had existing authority, under Canada’s food and drug regulations, to approve biosimilars established on an abridged set of data than was submitted for the brand product, without the need for new regulations. What a bold concept!

I checked with BioWorld’s Washington editor, Mari Serebrov, who has been following the regulatory hoopla closely. She pointed out that “In many ways, the world is not waiting for the FDA to lead the way.”

Following such examples doesn’t guarantee safe and effective biosimilars in the U.S., but it does offer evidence that transitioning from biosimilar bureaucracy to actual commercialization isn’t going to result in an apocalypse of therapeutic proportions, either.

Even after establishment of a biosimilars market in the U.S. becomes a reality, the joke will still likely be on applicable drugmakers, inasmuch as the U.S. is leaning toward the market version that would require a full schedule of preclinical and clinical trials, which could make biosimilar drug development as expensive and laborious as the brand R&D schedule. That would make it difficult to offer deeply discounted biosimilars.

Legislation has passed and now guidelines have been issued, but U.S. biosimilar regulations are still an unfinished symphony and production is still a pipeline dream. The FDA is creating such a fazing series of clinical hoops for biosimilar producers to jump through, that it stands to constrain the number of companies that are moneyed enough to play the game and also raises the R&D bar for clinicians, while increasing the cost that patients will have to pay to compensate for the pricey clinical trials.

One of the elements of the Act was to facilitate lower-cost versions of expensive biotech drugs, but the eventual savings may not be as deep or come as quickly as hoped. Healthcare providers and other industry authorities say regulatory delays and the possibility of significant patent litigation could thwart the takeoff of the biosimilars market through most of this decade and wind up saving patients as little as10 percent to 20 percent off the cost of brand biotech drugs, compared to savings of as much a 90 percent on generic pharmaceutical drugs.

The big finale prank-in-waiting, according to Mari’s insight, could send the biosimilars movement backpedaling to square one, inasmuch as if the Supreme Court throws out the entire healthcare bill, the biosimilars snail express would be discarded in the mix, since the AHCA granted the FDA the authority to create the biosimilar pathway in the first place. Healthcare reform bill repeal would render the biosimilars guidance nonexistent as well as rendering the biosimilars developers fooled twice in the same year!

One small step for biosimilars; one giant extension for brandmakers.

Though we have only biosimilar path guidance in 2012, hope abounds for 2013 – but no promises. When biosimilars are eventually approved, they’d better be under a perfect system, as that will be the only way to justify its long and winding road. Meanwhile, biosimilar lobbyists and drugmakers, you are the 2012 April Bio-Fools – again – for the 10^th time! And your names are already on the list for the 2013 competition.

Even as the villainous economy brought drama to the world stage with its own tour de force production, the biotechnology market continued to receive generally positive-to-cautious reviews from industry critics and everyone else who had a speaking role in the market. Its performance and celebrity status have only been upstaged or matched since 2000 by its primary rival: high technology – which is led by the acting of the Meryl Streep of stock market performers: Apple Inc.

But biotech’s stock continues to rise also, thanks to its made-in-Hollywood hook-up with the winner of the Best Supporting Role in a Market Pairing: Big Pharma. Biopharma is the new Brangelina! So stick out that leg, Biopharma, and strike a pose!

After all, the script that biotech has acted out in the 21st century has mimicked the adapted-for-the-screen storyline of Stieg Larsson’s well-received Millenium Trilogy. Biotech – increasingly throughout the past decade and forecast right through this one – is assuming the role of The Market with the Dragon Tattoo, as everyone wants China in their picture. That country is the odds-on favorite to bring home the award for Best Performance in a Foreign Language Market for the next decade, as it ascends to the top of the A-list while mesmerizing the entire drug industry audience.

The Market That Kicked the FDA Nest was produced during the golden age of biotech, when the market churned out 269 drugs between 2000 and 2010, while weathering the VC drought and a global economic near-apocalypse. The movies may produce more blockbusters, but biotech saves lives in blockbuster numbers. Plus, I don’t think many films have cost $1 billion and taken 10 years on average to produce, while that’s biotechs’ median. The show must go on!

Biotech survived on method acting as The Market That Played with Fire, during the most recent years of this millennium. It honored its contract and performed its own stunts in battling the Extremely Loud and Incredibly Close Recession on location for three years to entertain its stakeholders, patients and fans. Even when there was talk of an Economy II: The Sequel, an exhausted biotech market never ran off to rehab, and only had one thing to say: “Makeup!”

The most biotech-applicable movie quote of the year came from Harry Potter, who said “When have any of our plans ever worked? We plan, we get there, all hell breaks loose!” How many times have you heard that in the clinical trial lab?

Roche Inc. is involved in a sequel of its own – Final Destination II, in reprising its role as the Lord Voldemort of unwelcome M&As, this time bent on controlling the Mid-Cap Earth of biotech. This time around, the role of Genentech Inc. is being played by Illumina Inc., which is staging a defiant Footloose reprise that worked so well for Genentech in resisting Roche’s hostile takeover until they relented and upped the box office take to $95 per stock ticket.

Lights! Camera! Action! Or in this case, Innovation! Capital! Research!

The nominees are:

Mission Impossible: Biosimilars Protocol – An idealist gets in over his head with lobbyists, regulators, pols and black marketeers in a quest to . . .

My Week Decade with Marilyn Margaret ‑ The recollections of an ingénue drug candidate that sought self-validation from the approval of others, while navigating the dreaded Hamburg maze, rife with complete response letters, red tape quicksand, legal maelstroms . . .

Obesity Market & the Deathly FDA Hallows: Parts I, II & III – A disaster movie with tear-jerker elements, this is the tragic story of lorcaserin, Qnexa and Contrave, lured by the bright lights of an inestimable, but weighty . . .

The Help – A feel-good, coming-of-age tale about the combination diagnostics market and the unlikely friendship of two disparate souls searching . . .

Moneyball – This offering is the rags-to-riches story of Pharmasset Inc., befriended by a New Money benefactor after growing up on the Street with little more than a small cap and a . . .

Bridesmaids – Runners-up will be left for dead on the HCV battleground in this epic war movie with a spectacular cast of stars battling it out to claim a winner-take-all foothold in the impending . . .

The Iron Lady – A patent-cliffhanger following the rise-and-prematurely-speculated-fall of the centenarian (and Lifetime Achievement Award recipient) War Horse pharma market, from its dubious beginnings, up to its current May-December romance with biotech as . . .

Twilight: Breaking Dawn – A sexy potboiler, starring the hottest young bodies-with-brains in biotech – DNA sequencing. These stud companies are charged with the ground-breaking task of potentially eradicating disease as we know it. And they get to take off their shirts a lot and expose their own blessed genetic buildups, as well as those in the blueprint for the human . . .

The Descendants – This fish-out-of-water fantasy tale follows the journey of biosimilars down the Yellow Brick Road to a hard-fought . . . oh, my bad, this project is still “in development Hell,” as we say in the business!

And the winner is . . .?

On Business

“Biotech is all about picking the exception. Granting access to capital to everyone doesn’t strike me as the right idea.”

‑ Bob More, general partner with Frazier Healthcare Ventures, taking an optimistic view on capital constraints. Private biotechs continued to struggle in 2011, raising about as much money as in 2010.

"I think we're going to see a regression to quality."

‑ Jim Healy, general partner at Sofinnova Ventures, on how the venture contraction will mean that only the highest quality companies get funded. Several venture groups pulled out of biotech investing during 2011.

“The take-home message is that it’s easy to build a $25 million company with $100 million cash.”

‑ Tillman Gerngross, CEO of Adimab LLC, on the trend of sliding valuations post-initial public offering. Although a handful of biotechs went public in 2011, the window did not open as wide as some had hoped.

"You can't save your way to success in this business."

‑ Marina Biotech Inc.'s CEO Michael French on the tough financial choices small biotechs must make, such as accepting harsh terms to keep a company moving forward.

“Monday, I was in Chicago, presenting at ASCO. Tuesday, I’m in California, pitching at Goldman (Sachs). And Wednesday, I’m in New York, presenting at Jefferies. How many red-eye medallion miles does it take to get one deal?”

‑ A jet-lagged biopharma CEO, taking a break at the Jefferies 2011 Global Healthcare Conference, and illustrating just how hard biotechs had to work to close financings and partnerships in 2011

On Science

“What happens when the next 10 patients you see require eight different drug combinations based on the mutations in their tumors?”

‑ Outgoing ASCO president George Sledge, on the exponential increases in complexity required to tackle “chaotic” tumors with high mutational load. Personalization of medicine continued to be a theme at ASCO and AACR in 2011.

"You do have to be somewhat of a Talmudic scholar to prescribe this drug."

‑ Lawrence Friedman, member of the FDA Antiviral Drugs Advisory Committee, referring to the regimen for Merck & Co. Inc.'s hepatitis C candidate boceprevir. His comments illustrate the difficulties of putting more personalized treatment regimens into practice.

"The fact that it's inefficient doesn't mean it hasn't made great contributions."

‑ John Mendelsohn, president of the M.D. Anderson Cancer Center, on the National Cancer Institute-sponsored collaborative clinical trials program

“It disturbs me that people are willing to accept this: treating the symptoms and allowing the disease to progress.”

‑ Jerry Colca, president and chief scientific officer at Metabolic Solutions Development Co., on new diabetes drugs

“For every target, almost every company has an inhibitor against it. Medically, as well as economically, we truly need something to get beyond that."

‑ Chiang Li, CEO of Boston Biomedical Inc.

General Wisdom

"A lot of innovation is incremental, not breakthrough."

‑ Glen Giovannetti, global biotechnology leader at Ernst & Young

“I realize it’s absurd to talk about 10Xs or even 5Xs these days.”

‑ Roger Longman, CEO of Real Endpoints LLC

“A combination of good science, good collaborations, good timing and some good luck.”

‑ Mace Rothenberg, Pfizer Inc.’s senior vice president of clinical development and medical affairs in the Oncology Business Unit, on the secrets to the success of lung cancer drug Xalkori (crizotinib)

"You can only set yourself on fire once."

‑ Oleg Nodelman, partner at Biotechnology Value Fund, referring to how pharma stocks tend to jump when they severely cut R&D budgets

"Clearly, there are easier and less insane ways to make a living."

‑ Jim Greenwood, BIO president and CEO, at the BIO 2011 keynote luncheon

The past year brought the biotech sector a mixed bag of news. Some of it was positive – for instance, the FDA picked up its drug approval pace in 2011 and, in some cases, even surprised the most hardened biotech investors by granting approval of some drugs a month or two before their PDUFA dates – while other headlines hailed discouraging trends such as the failure of Prospect Ventures to close its latest round, confirming predictions of a venture capital contraction.

As we get ready to head into 2012 (and possibly an apocalyptic count-down, if those Mayans are to be believed), let’s take a look back at some of the highs and lows of the biotech industry in 2011.

‘Me-First’ Instead of ‘Me-Too’

Biotech execs always talk about tackling unmet medical needs. So it was exciting to see in 2011 the flurry of breakthrough drugs hitting the market. An informal BioWorld poll tagged Seattle Genetics Inc.’s lymphoma drug Adcetris (brentuximab vedotin), the first approved antibody-drug conjugate, as the biggest drug approval of the year, tied with HCV game-changers Incivek (telaprevir) from Vertex Pharmaceuticals Inc. and Victrelis (boceprevir) from Merck & Co. Inc. But other notable approvals included Human Genome Sciences Inc.’s Benlysta (belimumab), the first lupus drug approved in 50-plus years, and Yervoy (ipilimumab) from Bristol-Myers Squibb Co. and Zelboraf (vemurafenib) from Roche AG and Daiichi Sankyo Co. Ltd. as the first two drugs approved for melanoma that actually improved overall survival in clinical testing. And, late in the year, Incyte Corp. scored a win with Jakafi (ruxolitinib), the first approved JAK inhibitor and the first drug for myelofibrosis.

Let’s all hope that trend of “firsts” continues in 2012.

A ‘Nobel’ Death

In a bit of irony (in an Alanis Morissette kind of way), the Nobel committee awarded one-half of the 2011 Nobel prize in physiology or medicine to Ralph Steinman, unaware that the Rockefeller University professor had died of pancreatic cancer three days earlier. Posthumous Nobels are unusual but, after brief debate, the committee wisely decided to allow Steinman to remain a Nobelist. And I’m glad. He certainly earned the title for his discovery of the dendritic cell and its role in adaptive immunity. Plus, according to BioWorld’s science editor, Anette Breindl, who heard Steinman speak in 2007, he was a pretty nice guy.

Best Bang for the Buck?

The biggest M&A deal in 2011 was easily Sanofi SA’s $20-billion-plus-contingent value rights buyout of Genzyme Corp., which followed nine months of often less-than-friendly negotiations. But it wasn’t the best deal for biotech investors. Genzyme shareholders already have lost out on the $1 CVR connected to manufacturing capacity for enzyme replacement therapies Cerezyme and Fabrazyme. Whether they will be able to earn the remaining $13 linked to multiple sclerosis drug Lemtrada (alemtuzumab) is up for debate, and, for the most part, analysts are not optimistic.

If I were to choose, I’d say that Daiichi Sankyo Co. Ltd.’s bid for Plexxikon Inc. and Shire plc’s buyout of Advanced BioHealing Inc. were far more successful M&A deals. Daiichi’s hefty $935 million payment for Plexxikon – a move validated when Zelboraf gained approval in August – came despite only getting U.S. co-promotion rights to the melanoma drug under Plexxikon’s existing partnership with Roche AG. The Shire/ABH deal, meanwhile, showcased the kind of investor returns rarely seen these days. The big pharma firm shelled out $750 million for ABH, a whopping 15x return for ABH’s largest shareholder.

‘Weighed’ Down by Safety

Despite health experts clamoring for new ways to treat the so-called obesity epidemic, drugs aimed at helping people lose weight have not had an easy time of it at the FDA. Industry observers had expected 2011 to usher in not one, but three obesity therapies; instead, all three were rejected by the FDA. Orexigen Inc.’s Contrave got stalled on cardiovascular concerns, while Vivus Inc.’s Qnexa raised worries of birth defects related to one of its generic components and Arena Pharmaceuticals Inc.’s Lorquess bumped up against carcinogenicity concerns. Contrave is set to start a large cardiovascular outcomes study, which would delay its approval until 2014. But Qnexa and Lorquess could have a shot at getting approved in 2012. That’s assuming that no additional safety issues crop up. Given the track record in the obesity space, that’s definitely no guarantee.

The Rough Side of Town

While 2011 had its much-lauded drug approvals (as noted above), the year was not without its disappointments. Two promising areas of research suffered blows – Roche pulled out of the RNAi space, dumping a high-dollar collaboration with RNAi powerhouse Alnylam Inc., while Geron Inc. abandoned its position as embryonic stem cell pioneer to focus on a less-risky cancer drug. But the biggest disappointment of the year – as chosen by 41 percent of respondents to a BioWorld poll – was the slow sales of Dendreon Corp.’s prostate cancer vaccine Provenge (sipuleucel-T). Sales fell way below estimates, and, over the course of the year, Dendreon’s shares have lost about 80 percent of their value. The Seattle-based company has since retrenched and is hoping European approval, now pending, will help accelerate revenue growth. We’ll be watching in 2012.

And the Strange Bedfellows Award Goes to . . .

Probably one of the most bizarre deals ever in biotech was 2011’s short-lived merger agreement between Allos Therapeutics Inc. and AMAG Pharmaceuticals Inc. Having in common only commercially underperforming products – Allos’ Folotyn (pralatrexate) for peripheral T-cell lymphoma and AMAG's iron deficiency drug Feraheme (ferumoxytol) – execs from both firms tried hard to convince investors and analysts of the logic in combining the companies by pointing out a handful of “cost synergies.” But the merger was met with opposition from the get-go and even prompted hedge fund MSMB Capital Management to make an unsolicited bid for AMAG. Unsurprisingly, the deal was voted down by AMAG shareholders. Seriously, what were they thinking?

Well, that’s my list of headline-grabbing biotech news in 2011. But it’s hard to remember a whole year, and I’m sure I’ve forgotten something. What do you think were the biggest events in biotech in 2011?

You think the drug shortage is a devil now

Just wait around a few years

’Cause you ain’t seen nothin’ yet.

When that biosimilar pathway begins to flash

Those big green dollar signs,

You’ll know, you’ll know, you’ll know, you just ain’t seen nothin’ yet.

Those biosimilars will turn your heart away from the old drugs of yesterday.

You’ll think you have it comin’, and you’ll want it that way.

You’ll say big profits are good profits, so you’ll take what you can get.

B-B-B-Baby, you ain’t seen n-n-n-nothin’ yet.

Patients will go to the doctor, and he’ll tell them of a cure.

But they won’t be feelin’ better, ’cause it’ll be the one they just can’t get.

They’ll wait, they’ll wait, they’ll wait. And then they’ll take whatever they can get.

B-B-B-Baby, we ain’t seen n-n-n-nothin’ yet.

With all due apologies to Bachman Turner Overdrive (listen to the classic rock tune here), I’m afraid we ain’t seen nothing yet when it comes to drug shortages. As we’ve reported in BioWorld Today, the bottom line is often behind a drugmaker’s decision to stop making older, off-patent drugs with low profit margins. Making a drug that sells for 48 cents a vial just doesn’t make good business sense.

It will make even less ‘cents’ when the biosimilar pathway really opens up. Many generic and big pharma companies are already developing biosimilars, lured by pricing that could be 80 percent of the innovator biologic, which can sell for thousands of dollars.

As they spend more on biosimilars, these companies may be even less committed to providing the tried and true, older drugs. Thus, my sad refrain:

You ain’t seen nothin’ yet,

B-B-B-Baby, you just ain’t seen n-n-n-nothin’ yet,

Here’s to the drugs we’re not gonna get,

B-B-B-Baby, you just ain’t seen n-n-n-nothin’ yet

If you’re thinkin’ they ain’t gonna be around, that’s right.

Take the president’s repeated call for shorter data exclusivity for biologics, beginning in 2012. Just last year, Congress made 12 years the law of the land. Changing it now is a) premature, b) unnecessary and c) absolutely pointless. As we’ve reported in BioWorld Today, the FDA is not ready to be deluged with biosimilar applications. And the biosimilar user fees that will pay for the path won’t even be in place until 2013.

So what’s to be gained by reducing the exclusivity? In his debt-reduction plan, the president claimed a seven-year exclusivity would result in $3.5 billion in savings to government programs over the next 10 years because it would speed the launch of cheaper biosimilars. But when he made the same proposal seven months ago, he said it would save $2.34 billion. (Is it just me, or does that $1.16 billion discrepancy suggest some uncertainty?)

In another bit of double-speak in the debt-reduction plan, the president explained the need to reduce Medicare spending, saying that despite the efforts made in the Affordable Care Act, the Medicare trustees “still estimate” the trust fund will be exhausted in 13 years. He adds that his proposals, which would save about $224 billion over 10 years, will protect beneficiaries and “strengthen Medicare overall.”

A few sentences later, we learn just how certain Medicare’s future will be if the president’s plan is enacted: “These measures are expected to extend the solvency of the . . . trust fund by about three years” (emphasis added).

Kicking the can down the road a few years offers little in the way of certainty, especially when the government keeps changing the rules. “Living within our means” isn’t just about dollars. It’s also about long-term reform that industry, and patients, can bank on.