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?

As company after Chinese company pitched and presented, the Q&A at the end of each session seemed to steer away from the usual grilling about the companies’ worth and pipes. Instead, questions were focused on how to get a toehold in China. Where to start? How to deal with the government? Should we go it alone or partner with existing Chinese companies?

A few weeks ago a contingent of U.S. executives, led by the Biotechnology Industry Organization’s President and CEO Jim Greenwood, visited China. It was a sort of pregame show in advance of BIO’s first China International Partnering Conference in October in Shanghai. The execs came home awestruck. BioWorld Today’s Tom Wall wrote about their impressions from that visit in a new series dubbed Biotech’s Emerging Giant, with the first article found here: http://bit.ly/k8kcJ2

Joshua Boger, founder of Vertex Pharmaceuticals Inc., of Cambridge, Mass. visited a manufacturing site for starting materials for the company’s just-approved hepatitis C drug Incivek (telaprevir), and declared the facility to be so immaculate and well prepared that “You can eat off the floor. Everything over there is so much better coordinated.”

In part II of the series published today, Wall interviews executives who are advising slow comers to light a fire under their China strategies . . . if a company expects to be around in the next five to 10 years.

BioWorld Insight contributing writer Brian Orelli did some analysis and found 13 terminated pharma-biotech agreements so far this year, compared to eight terminations in the same period last year.

What’s the big deal?

Chris Dokomajilar, senior biotech analyst at Deloitte Recap LLC, says it’s partially a numbers game: more deal-making activity means more deals that fail. Also to blame is the fact that many partnerships are hitting the critical Phase II and Phase III stage, when 64 percent of deal failures take place. Pharma’s cost-cutting hasn’t helped either.

But the news isn’t all bad – not for biotech anyway. Of 474 terminated alliances in Recap’s database (which goes back to 1977), 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 one-in-four chance of finding a new home.

Read the full article here: http://ow.ly/4VnJP