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?

The Nobel Prizes are not usually awarded posthumously; the Nobel Prize website, in fact, states that such awards are “not possible,” and so it is unclear whether Steinman is, indeed, a Nobelist or not. According to a report by the Associated Press, committee members didn’t know Steinman was dead when they chose him as a winner and are reviewing regulations.

I was lucky enough to get to see Ralph Steinman speak at the 2007 Lasker Awards ceremony. But the main thing I remember about him is not from the speech itself, but from the reception beforehand, where, spotting one of his friends, he said, in a slightly dazed, slightly amazed tone: “So many people came!”

Perhaps it is because of this glimpse of humility that the questions about whether or not Steinman is a Nobelist or not remind me of the 1999 funeral of my grandfather.

For the record, my grandfather was no Lasker Award winner. In fact, he never went to college. Nor was Ralph Steinman anywhere near old enough to be my grandfather.

But in that pleasure of spending time and being appreciated by those who mattered to them, the two men remind me of each other.

At my grandfather’s funeral, we didn’t talk about biomedical research or Nobel Prizes, as far as I can remember. But we did talk about soccer. My grandfather was from Southern Germany, but his grandchildren had spread across much of the country, and at one point, we sat there wondering whether we had to root for his soccer team – Bayern Muenchen – to win in his honor, now that he was dead.

We sat there, and looked at each other, and then one of my cousins said “I can’t root for them. No, I can’t.”

At which point, one of my aunts broke in: “Oh, he’s in heaven now! Surely he’s relaxed a bit about that! I think that if anything, he has to root for our teams now.”

Twitter has been lively with discussion about whether Steinman can, and should, keep his prize. I hope he gets to, for his family’s sake.

But it also seems to me that, well, surely he has relaxed a bit about that. And from the sort of man he seemed to be, it seems entirely possible that he would want us to remember him, of course. But also to be happy for Bruce Beutler and Jules Hofmann today.

Rest in peace, Ralph Steinman, 1943-2011. I hope you are and remain a Nobelist. But whether you do or not, from the tiny glimpses I got, it looked like you made the most of your time here. And that, it seems to me, is what matters.

Mainly, when I look at these controversies, I am grateful that I write for such a smart audience. If you are reading this blog, chances are that you work in the biopharmaceutical industry – and if you do, there are exactly two possibilities: you know that most early stage treatments ultimately fail – or you’ve got bigger problems than whether my headlines are overly enthusiastic. Thank you, dear reader!

And I’ll admit that I was rather amused to read in several headlines that cancer immunotherapy is now the “holy grail” of cancer targeting, and that this work advances us toward that holy grail. I distinctly remember from last year that eradicating stem cells is the holy grail of cancer therapy. And these CAR T cells target the surface marker they do, CD19, specifically because it is not on stem cells. Ergo, this can’t be the holy grail of cancer therapy. So there.

Still, I’ll bet my own headline above made you do a double take. The fact of the matter is, few people want to read about the many things in science that don’t work. Few people want to read that this is an incremental advance, or the bigger story: three patients have had remissions, two died last year in separate trials using a similar approach, and we’ll know whether the approach works and is safe around, oh, 2016 if all goes well. Or maybe 2020.

I don’t know what the right answer is in terms of reporting advances. I suppose having a holy grail of the year isn’t it. Still, I agree with my colleague Catherine Shaffer’s recent post about how science has ceded the language of hope and instead made itself comfortable in a culture of low expectations – and why that’s a problem.

Yes, holy grail is over the top. So is some of the other coverage of this news.

But is it really better to write “Early stage advance has an 8 percent chance of leading to cancer treatment decades hence?”

And yes, it’s very important for anyone writing for a general audience, including cancer patients, to be explicit about the fact that these results will take a while to reach them, if they ever do.

But the fact of the matter is, this is how the blockbusters, the game-changers, the lifesavers get their start: with two or three or five eye-popping successes that make drug developers take notice, and do what it takes to get to the next step.

And yes, most of these starts are false ones.

But all of the real starts start here.

They do not start with the quacks and hacks who advocate maple syrup and baking soda, as Catherine detailed in her blog post, or breast milk, which a woman at my church swears cured a family member of leukemia and cheerfully recommends to anyone with a newly diagnosed relative, dismissing their anguish and fears in a way that is as grating as any oncologist demigod could be, in the name of “positive thinking.”

It may be worth remembering a similar ruckus in 1998, when the New York Times ran a story about the promise of angiogenesis. EntreMed Inc. had a huge stock run-up, followed soon enough by a crash. The fur flew on the then smaller Internet, including a rather angry article titled “The New York Times Cures Cancer!”

Whether the New York Times article was overly optimistic (for the record, I didn’t think so, but you can read the story yourself or its placement above the fold on p. 1 of the Sunday Times was too prominent is hard to say. But my point is this: blocking angiogenesis is now a successful clinical strategy.

I’ll say it one more time: Most of these starts are false ones. But all of the real starts start here.

We need to watch our language. But we can avoid reporting on the duds only at the price of not reporting on early signs of hope at all, leaving those looking for hope to search among the baking soda and the breast milk.