(Bring up music intro.)

In its colorized remake of the budget-busting melodrama How Government Functions, the FTC plays the white-hatted good guy come to cut down the gang of biopharma villains while the local sheriff (Congress) sits idly by, his pockets stuffed with Big Pharma bribes. The action climaxes as the FTC rescues the sweet, helpless heroine, Ms. Generics, and speeds her on her way to the marketplace. As the sun sets, the townspeople, long beholden to the greed of the biopharma gang, cheer loudly and stock their medicine cabinets with nothing but generic drugs.

(Clapping FX as the FTC flashes its applause light. Fade to black.)

Rather than rewriting its lines, the FTC needs to stick to the script, and role, it’s been handed. Like it or not, Congress is the elected star of the Beltway – and the only writer of federal laws.

If Congress wants to end pay-for-delay settlements, it can pass a law to do it. It thought about it while scripting PDUFA. But it decided not to.

If Congress wants to close the loophole that permits brand companies to restrict generics’ access to drugs with risk evaluation and mitigation strategies, it can pass a law to do it. Lawmakers also thought about that while fleshing out PDUFA. But, again, they decided not to.

The FTC needs to stop trying to steal the show by ad-libbing laws as it goes along. As an appointed commission, it doesn’t have the chops to be the lawmaker. Or even the understudy.

(Roll credits. Be sure that “FTC” comes after the name of the stars and is in smaller print as is befitting the role of supporting actors.)

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?

October

The Obesity Society annual meeting (1-5): With Orexigen Therapeutics Inc., Vivus Inc. and Arena Pharmaceuticals Inc. in various stages of responding to FDA concerns and slogging forward once again, the potential (futility?) of obesity therapeutics is sure to be a hot topic.

BIO Investor Forum (25-26): BioWorld will be on site in San Francisco for this one – drop us a note at newsdesk@bioworld.com if you’ll be there, too!

November

The American Association for the Study of Liver Diseases: The Liver Meeting (4-8): With the recent launch of Vertex Pharmaceutical Inc.’s Incivek and Merck & Co. Inc.’s Victrelis, HCV will be top on the agenda at this year’s liver meeting. Expect plenty of focus on up-and-coming antivirals as well. BioWorld will be there to tease out and report the top news.

Iluvien PDUFA (12): After a complete response letter in late 2010, Alimera Sciences Inc. and pSivida Corp. are at it again with diabetic macular edema drug Iluvien.

Neuroscience (12-16): Big pharma may be pulling out of some areas of central nervous system drug discovery, but that leaves all the more opportunity for biotech.

Eylea PDUFA (18): Regeneron Pharmaceuticals Inc. already has unanimous backing from an FDA panel for this Lucentis competitor in wet age-related macular degeneration.

Earnings (varied): We’ll be watching sales performance of recently-launched biotech drugs like Dendreon Corp.’s Provenge, Human Genome Sciences Inc.’s Benlysta, Optimer Pharmaceuticals Inc.’s Dificid, and Vertex’s Incivek, among others.

December

Ruxolitinib PDUFA (3): Incyte Corp.’s JAK1/JAK2 inhibitor for myelofibrosis is expected to be a strong seller, though YM Bioscience Inc.’s CYT 387 could be a fierce competitor in a few years.

American Society of Hematology’s 2011 ASH (10-13): BioWorld will be on-site at this blood cancer extravaganza, where there’s never a shortage of exciting data and controversial discussion, such as on the FDA’s feeling about single-arm Phase II trials as a basis for approval.

Much more!

We’re just scratching the surface of exciting biotech milestones coming before the end of the year. Also watch for data from Biogen Idec’s second Phase III trial of multiple sclerosis drug BG-12, interim data from Medivation Inc.’s Phase III trial of MDV-3100 in prostate cancer, data from Exelixis Inc.’s Phase III trial of cabozantinib in medullary thyroid cancer, and so much more! And if you’ve got news coming, be sure to let us know (under embargo is possible).

PS – Looking for a great list of biotech conferences (scientific, banking and industry)? Check out MacDougall BioMedical’s calendar.