Ascletis will establish its U.S. research and development operations on the Hamner campus. Other operations of the company will be in the National High Tech Industry Development Zone in Hangzhou, a city about two hours southwest of Shanghai.

Jinzi Wu

Founded this year by Jinzi Wu, former head of global HIV drug discovery at GlaxoSmithKline in RTP, and Jinxing Qi, a Chinese real estate investor and chairman of the Hangzhou Binjiang Real Estate Group, Ascletis has $100 million in commitments from U.S. and Chinese angel investors. The company plans to establish a global therapeutics business that targets cancer and infectious diseases.

Allan Baxter, former global head of medicines development at GSK, will lead Ascletis’ discovery and development strategy as chief strategy officer.

According to its Web site, the company aims to buy the rights to new treatments, develop them and introduce them to the growing Chinese pharmaceutical market.

Allan Baxter

Projected to generate about $60 billion in sales this year, the Chinese pharmaceutical market is increasing at an annual rate of more than 20 percent, according to a report by strategic consulting firm The Monitor Group. By 2015, Monitor advisors expect China to rank second in market size to the U.S. and ahead of Japan, Germany, France and the United Kingdom.

Incidence and mortality rates for lung, stomach, liver and breast cancers are comparable or higher in China than in the U.S., the Monitor report pointed out. But competition among pharmaceutical companies is high in China. Nearly all multinationals and numerous local firms are jostling for market shares.

Also, health insurance coverage in China is improving rapidly. In the past two years, the Chinese government invested more than $160 billion in healthcare reform.

Bill Greenlee, the Hamner’s chief executive, and Wu, chief executive of Ascletis, signed the joint venture July 16 at the U.S.-China Governors Forum in Salt Lake City. At the same forum, N.C. Gov. Beverly Perdue and Zhao Hongzhu, the party secretary of the province to which Hangzhou belongs, signed an agreement to foster business and economic development between North Carolina and Zhejiang Province through commercial interactions.

Subba Katamreddy

Former GlaxoSmithKline researcher Subba Katamreddy did what came natural to a medicinal chemist who in 2008 got caught at the beginning of U.S. drug research and development cutbacks that have rocked large pharmaceutical companies since then.

Katamreddy started his own drug discovery company, Vijaya Pharmaceuticals, and established a lab in the Park Research Center incubator in Research Triangle Park to explore some ideas he had for next-generation antibacterial and anti-inflammatory treatments.

So far, Katamreddy and his wife, Vijaya, have financed the startup on their own. Katamreddy is about to start making molecules to develop technology that he can patent and use to attract more investors. But funding early stage startups has gotten more difficult this year despite more money being raised.

So, Katamreddy has begun to take in contract work to generate revenue. He’s determined to keep going and hopes to hire a couple of employees in the next three to five years. “Vijaya,” is Telugu, a language that is spoken in the southern Indian region where the Katamreddies are from, and stands for “victory.”

“Whether you’re in a small lab or a big lab,” Katamreddy said, “an idea is an idea.”

He’s had good ideas before. During his seven years at GSK in RTP, Katamreddy was involved in discovering two experimental drugs. His area of research was metabolic diseases such as adult-onset diabetes. Large pharmaceuticals are investing heavily in finding treatments for diabetes and other chronic diseases, because these diseases are on the rise and require ongoing treatment.

Vijaya Pharma is treading were large pharma hasn’t.

The number of antibacterial drugs the Food and Drug Administration approved for sale declined 56 percent from 1983 to 2002, according to an analysis published 2004. Demand for new drugs is rising with the spread of multi-drug resistant bacteria. (More on the problems superbugs are causing here.)

Katamreddy is particularly interested in a group of antibacterials called macrolides. This group includes erythromycin, an antibiotic that is used to treat pneumonia, venereal disease and urinary tract infections.

Cempra Pharmaceuticals, another young drug development company in the Research Triangle, is testing a macrolide in patients. (More on Cempra Pharmaceuticals here.) There’s also some interest in macrolides outside of the U.S. European researchers are studying a macrolide to treat inflammatory bowel disease and rheumatoid arthritis. But large pharmaceutical companies hesitate to invest in antibacterial research, because successful drugs are used once and for a short time only.

Katamreddy’s other idea is related to a known anti-inflammatory called curcumin, which is the biologically active ingredient in the Indian spice turmeric. Researchers have tested curcumin’s effect on Alzheimer’s patients and cancer cells. Dennis Liotta, a researcher at Emory University, is also studying curcumin as a cancer treatment.

Large pharmaceutical companies have not shown much interest in curcumin, because it can’t be patented and it doesn’t stay in the body long enough. Katamreddy wants to tinker with naturally occurring curcumin, but he’s not ready yet to say how.

Pfizer signed a research collaboration with the University of California, San Francisco. Sanofi-Aventis has done the same with Harvard University, UCSF and Stanford University. GlaxoSmithKline and AstraZeneca called on the British University of Manchester. GSK, which is based in London and has its U.S. headquarters in Research Triangle Park, also struck up a strategic partnership with 16 academic institutions in Toronto.

Tom Denny

In the Research Triangle, Novartis went to Duke University.

“We had the right infrastructure,” said Tom Denny, chief operating officer of the Duke Human Vaccine Institute. Duke and Novartis will be working together on pandemic flu vaccines.

Big pharma companies have begun to troll for marketable innovation at universities – places where science and research are a taxpayer- and tuition-funded way of life – after spending increasing amounts of money on their own and other companies’ research and development with meager results.

Consolidation, R&D reorganizations, acquisitions of technologies and whole companies – large drugmakers have tried many strategies in the past decade to rejuvenate aging product lineups and plump up drug development pipelines. But the average number of innovative new medicines that came to market in the U.S. decreased to 22 in the second half of the decade from 28 in the first half, and that despite annually rising R&D expenses.

As blockbuster drugs lose patent protection, remaining sales drop off a cliff.

With R&D productivity stalled and valuable drug patents about to expire, big pharma three years ago began to cut R&D jobs and lay off thousands. The restructuring is still ongoing with a focus on reducing R&D expenses and boosting sales in emerging markets such as Asia and Latin America.

The driver behind the cost cutting is the U.S. “patent cliff.”

By 2015, cheaper generics are projected to replace prescription drugs worth more than $100 billion in U.S. sales. The losses are expected to send sales on a sharp decline that, drawn as a line, looks like a cliff.

After trying everything else with insufficient success, large pharma companies are now betting on universities for inspiration.

Pfizer agreed to pay UCSF $85 million over five years. Under the agreement, researchers from Pfizer and UCSF will work at UCSF labs to turn research into potential biological medicines.

The University of Manchester will receive about $16 million from GSK and AstraZeneca. The investment will establish a translational research center and recruit scientists who will look for novel treatments for inflammatory diseases, such as asthma and rheumatoid arthritis.

The pharma industry has long had relationships with individual university professors. It’s also not uncommon that university medical school faculty work with industry to test new treatments or that an academic research project attracts the interest of pharma companies. What’s new is that big pharma companies are outsourcing R&D to universities.

The seed for the pandemic flu vaccine collaboration grew out of an HIV/AIDS collaboration between Novartis and Duke, Denny said.

The Novartis vaccine manufacturing plant in Holly Springs.

One of the Novartis HIV/AIDS researchers was a Duke alumnus who knew his alma mater was just 30 miles from the state-of-the-art flu vaccine manufacturing plant Novartis opened in 2009 in Holly Springs. (More on the Novartis plant here.)

Flu viruses can change from year to year and vaccines have to be made to match the anticipated changes in the virus. But it’s only safe for researchers to work with highly contagious, maybe even deadly, flu virus strains in a specially equipped biocontainment lab. Duke has such a lab and the ability to test pandemic flu vaccines on animals.The vaccine manufacturing plant, which Novartis build in Holly Springs precisely because of the site’s proximity to RTP and its three anchor universities, has neither.

In case a new flu virus starts spreading around the world and the Centers for Disease Control and Prevention and the World Health Organization call a pandemic emergency, the agreement gains Novartis priority access to the Duke biocontainment lab within 24 hours for a daily fee.

The agreement also allows researchers from Duke and Novartis to collaborate on longer-term projects paid for by grants from the National Institutes of Health. The rights to any technology would be jointly owned by each partner, Denny said.

“This is, what we would hope, a long-term collaboration,” he said.

Intimidation, a leak and a private meeting

A two-year investigation by a Senate committee didn’t solve the question whether GlaxoSmithKline’s diabetes pill Avandia does or doesn’t increase the risk of heart attack. But the report issued by the committee’s Democratic chairman and ranking Republican member claims GSK, which has its U.S. headquarters in Research Triangle Park, deliberately kept the evidence inconclusive  to avoid having to withdraw the drug from market.

Warning signs about possible cardiovascular side effects arose as early as 1999, but GSK forced Dr. John Buse, a diabetes expert at the University of North Carolina at Chapel Hill, to stop talking and writing about his concerns. According to the report, GSK threatened to sue Buse and complained about him to his superiors.

The Senate committee investigators, who reviewed more than 250,000 documents, determined that GSK was aware Avandia possibly increased cardiovascular risks as early as 2004 but failed to disclose this to patients and physicians.

In May 2007, the New England Journal of Medicine published an analysis of 42 studies by Dr. Steven Nissen, an outspoken cardiologist at the Cleveland Clinic. Nissen’s analysis suggested that Avandia was associated with a 43 percent increased risk of heart attack, a finding with which GSK executives strongly disagreed and that another researcher couldn’t repeat.

The Senate committee report found that a GSK consultant and peer reviewer for the medical journal leaked Nissen’s paper to GSK before publication. A week before the New England Journal of Medicine published the paper online, the New York Times reported, GSK asked Nissen during a private meeting to reconsider publication.

In a statement, GSK rejected the conclusions of the Senate committee report as unfair and unbalanced and accused the investigators of mischaracterizing GSK’s research efforts.

Doctors have long abandoned the drug regardless of whether they believe it poses increased cardiovascular risks or not. As a result, Avandia’s sales have dropped from about $3 billion in 2006 to $1.2 billion last year.

In other business news:

• Biolex raised $10 million in investments and debt. The Pittsboro biotech company will use the money to continue testing a hepatitis drug in patients.
• Viamet Pharmaceuticals of Morrisville signed a drug research partnership with a venture capital arm of Swiss pharmaceutical giant Novartis. The deal could be worth more than $200 million.

GSK eyes more cuts in R&D

The cutbacks at large drugmakers have been a steady drumbeat for more than two years. In 2008, the industry shed about 44,000 jobs, followed by 59,000 last year, according to industry publication FiercePharma. This year, the cuts continue – AstraZeneca plans to shed 8,000 over four years, Novartis wants to reduce headcount by 2,500 this year and GSK is expected to eliminate 3,000 to 4,000 jobs worldwide.

Sales jobs were hit hardest when the industry-wide restructuring began in 2007, but R&D is now becoming the focus of the cost cutting. Nearly half of the cuts AstraZeneca announced last week will be in R&D and R&D jobs are expected to also account for nearly half of GSK’s cutbacks. On Thursday, GSK announced it is targeting R&D expenses but not which research centers will be affected or how many jobs are at risk.

First clues that the cuts may hit European GSK sites, where the company does much of its work on pain and depression, here. Researchers at GSK’s site in RTP focus on HIV/AIDS and infectious diseases.

In RTP and at its Zebulon manufacturing plant, GSK employs about 5,000 in sales, marketing, research and production.

Increasing competition from cheaper generic drugs and drugmakers’ inability to replace the lost sales are fueling the upheaval in the pharmaceutical industry in the U.S. and Europe. Meanwhile, countries with significantly lower labor costs, such as China, India and Brazil, are benefiting. For example, GSK has invested heavily to establish an R&D center with about 1,500 employees in China.

IBM unveils cloud computing center

IBM unveiled a $360 million data center on its RTP campus. The center will support cloud computing services for customers.

The data center is one of several efforts in the RTP area to scale up the ability to store and crunch increasing amounts of data.

Interest in cloud computing, which taps existing computing capacity like utilities tap electricity from a grid according to demand, is particularly keen among researchers and organizations working in the public health arena.

More information about cloud computing efforts in RTP here.

Durham startup snags cash and a deal

CancerGuide Diagnostics, a Durham startup, raised $10.5 million in venture capital and signed a deal with LabCorp, the medical testing giant based in Burlington.

The startup will be working on tests that allow oncologists to pick treatments best for each cancer patient. LabCorp will support CancerGuide Diagnostics in its efforts and own a stake in the startup, which is headed by Dr. Myla Lai-Goldman, LabCorp’s former chief medical officer.

Other investors were Intersouth Partners and Hatteras Venture Partners, two Durham venture capital firms.

Quintiles scores kid and caboodle

Quintiles Transnational, a Durham company that helps drugmakers test and sell new medicines, has scored extensive contracts with British drugmaker AstraZeneca and Japanese drugmaker Eisai.

The AstraZeneca contract gives Quintiles responsibility for the majority of the drugmaker’s clinical pharmacology, which includes the composition of the new drugs and their side effects. The Eisai contract covers six experimental cancer drugs that the drugmaker wants to test on 11 tumors.

Drugmakers have long outsourced development of new drugs, but contracts with companies such as Quintiles used to be for just one drug or one clinical trials.

Quintiles is taking on whole programs to try to reduce the time it takes to bring new medicines to market.

Stiefel consolidates in RTP

Stiefel Laboratories, which was bought by British drugmaker GlaxoSmithKline for about $3 billion in cash, is closing its corporate headquarters in Coral Gables, Fla., and an operation in Duluth, Ga., to consolidate its business in Research Triangle Park.

Stiefel, which specializes in skin products, moved its research and development to RTP three years ago.

The consolidation following the deal with GSK will move a few Stiefel jobs from Florida and Georgia to RTP. But many of the 260 Stiefel employees in Florida and Georgia will be laid off.

Symposium identifies research gaps

RTI International organized its fourth symposium to identify areas that require more research. The RTI Fellows Symposium, which was held Monday and Tuesday at the University of North Carolina’s Friday Center in Chapel Hill, identified several areas lacking of scrutiny, including personal medicine, global warming and the role of biofuels.

Reports on some of the presentations:

• Genes as weather vanes for disease
• Global warming worries drive biofuels research

  Related to greenhouse gases, Amory Lovins, co-founder of the Rocky Mountain Institute in Snowmass, Colo., talked about his vision of lowering carbon dioxide emissions at Duke University Wednesday.

Jury finds GSK negligent

A Philadelphia jury found that GlaxoSmithKline failed to properly warn doctors of birth defect risks the antidepressant Paxil posed when prescribed to pregnant women.

Lyam Kilker was born four years ago with heart defects his mother blamed on Paxil. The lawsuit was the first of about 600 to come to trial. The jury awarded the Kilker family $2.5 million in damages.

The Food and Drug Administration issued warnings in 2005 that Paxil may be associated with birth defects. But GSK argued that in Lyam Kilker’s case it wasn’t clear Paxil caused the heart defects.

GSK said it would appeal the verdict.

In other company news:

• GSK will invest $17 million in a new, $60 million science park that is about to be established near London. The British drugmaker, which has its U.S. headquarters in Research Triangle Park, and two other financial backers hope to attract enough young biotech companies to rival the biotech hub in Boston.
• Sales of Trimeris’ AIDS drug Fuzeon drop 35 percent in the third quarter.
• Two Leerink Swann analysts have Durham’s Inspire Pharmaceuticals on a watch list of five companies whose stock might increase rapidly in value. The analysts are betting that next year Inspire’s dry eye drug Prolacria will finally receive regulatory approval and come to market and that a partner will emerge for Inspire’s cystic fibrosis drug denufosol.
• Talecris Biotherapeutics announced the sale of $550 million in notes two weeks after its initial public offering raised about $900 million. The RTP-based maker of blood-based drugs wants to refinance some of its debt and add to the pool of money available for acquisitions.
• Affiliated Computer Services increased the number of hires at its call center in Raleigh by 150. The Dallas company, which already employs about 2,600 in North Carolina, announced in August an addition of 465 jobs at its Raleigh center.

Money going to companies

A drug-eluting stent that Micell Technologies, a Raleigh company with 10 employees, is working on has captured the interest of St. Jude Medical, a St. Paul, Minn.-based medical device giant with more than 10,000 employees.

St. Jude bought a $15 million stake in Micell to help the small company develop the stent. A special coating on the stent controls the release of drugs to keep diseased coronary arteries from clogging. But unlike other drug-eluting stents, Micell’s product promises to carry a lower risk of causing blood clots.

The stent is in the early stages of development and will require years of additional testing.

In other company news:

• Icagen, a Durham drug development company, renewed its research partnership with pharmaceutical giant Pfizer for one year. The partners are looking for new painkillers. The renewal means Icagen will receive a $5 million payment from Pfizer and will remain eligible to receive up to $359 million in milestone payments and royalties.
• Talecris Biotherapeutics is scheduled to go public Sept. 30 and raise nearly $800 million, excluding fees.

  About two-thirds of the proceeds, or $514.8 million, would go to the Research Triangle Park-based company to pay back loans. The remainder, about $281.5 million, would go to Cerberus, the New York buyout firm that bought the company four years ago for $303.5 million.

  Cerberus financed the deal with about $200 million in loans. A year later, the buyout fund pulled out an $800 million dividend, which brought Talecris’ debt to more than $1 billion.

• GlaxoSmithKline announced it will limit its funding for medical education programs that bring doctors up-to-date to academic medical centers. The drugmaker will stop paying commercial providers at a time when the pharmaceutical industry is under scrutiny for having to much influence on doctors.

Research money

A group of RTP-area universities, research institutes and nonprofit organizations banded together as the Triangle Global Health Consortium to chase a piece of the $63 billion the Obama Administration wants to spend over the next six years to revamp global health programs.

Congress has yet to approve spending the money, but representatives of the Center for Strategic and International Studies’ Global Health Policy Center, a Washington, D.C., think tank, came to RTP to gather ideas that can be presented in a report due next year.

More information here.

Also, the Duke Genome Center received $19.5 million to develop a portable device that detects upper respiratory viruses before they cause symptoms.

Salix soars on rifaximin data

Shares of Salix Pharmaceuticals are up more than 50 percent since the Morrisville company, which specializes in gastrointestinal treatments, announced results from two late-stage studies.

The studies showed rifaximin works better than placebo in treating non-constipation irritable bowel syndrome. Salix already sells rifaximin for traveler’s diarrhea under the name Xifaxan.

Treatments for non-constipation IBS generate about $2.2 billion in annual sales, but patients and doctors are looking for more choices with fewer side effects.

Salix stock dropped below $6 a year ago as the company struggled with generic competition. The day the rifaximin study results came out, Salix shares soared as high as $21.34. Since then, they’ve been close to $20 and attracting the attention of Credit Suisse pharmaceuticals analyst Catherine Arnold, who has tagged Salix an appetizing acquisition target for large drugmakers looking to boost revenue.

Pozen hires executive to broaden its scope

Pozen, a Chapel Hill drug development company, hired a chief commercial officer to develop licensing and marketing strategies for its drugs in development. Elizabeth Cermack, a former Johnson & Johnson executive, specializes in sales and marketing.

Founded in 1996, Pozen has long relied on partnerships with large drugmaker to help develop and market its medicines. Migraine pill Treximet, its first drug to receive regulatory approval, is sold by GlaxoSmithKline, which also helped develop it. Pozen also has a partnership with AstraZeneca to develop and bring to market Vimovo, an experimental painkiller that is easy on the stomach.

But the company, which never ventured into sales and marketing before, recently announced plans to broaden its scope and fly solo bringing to market its family of aspirins that promise to be gentler on the stomach.

GSK waits while competition gets ahead

GlaxoSmithKline, which has its U.S. headquarters in Research Triangle Park, hopes to get approval for Cervarix, a vaccine that blocks a major risk factor for cervical cancer, before the end of the month.

A Food and Drug Administration panel recently recommended the vaccine get cleared for sale after a series of delays. If the FDA follows the recommendation, Cervarix would become available in the U.S. three years after Merck’s version Gardasil was approved.

GSK is also still awaiting FDA approval of its H1N1 vaccine. Four competitors already got the regulatory nod.

The FDA giveth and Wall Street taketh away

GlaxoSmithKline’s Cervarix got a boost from Food and Drug Administration staffers who said studies showed the vaccine successfully blocked the human papilloma virus, or HPV, nearly 93 percent of the times. HPV infection increases the risk of cervical cancer.

Cervarix ran into regulatory roadblocks in 2007 and a panel of experts has yet to approve the vaccine for sale in the U.S. Gardasil, a competitor made by Merck that generated about $1.5 billion in sales last year, has been on the market since 2006 and has the added benefit to thwart two kinds of HPV responsible for most genital warts.

GSK, which has its U.S. headquarters in Research Triangle Park, hopes Cervarix will be a big seller like Gardasil to help offset expected sales losses due to generic competition.

GSK’s best selling asthma treatment Advair could come under full pressure from generics by 2011, an analyst warned. Advair, which is filled at GSK’s plant in Zebulon, generated $7.6 billion in sales, more than any other GSK drug.

In other company news:

• The FDA approved Metozolv, a fast dissolving treatment for a diabetic stomach disorder. Salix Pharmaceuticals, a Morrisville company that specializes in gastrointestinal treatments, owns the rights to market Metozolv. If taken for extended periods of time, Metozolv can cause muscle spasms and a movement disorder.
• XinRay Systems, a nanotechnology startup in RTP, received a $1.13 million research contract to develop and test X-Ray equipment using carbon nanotubes for the Department of Homeland Security. The equipment will be designed to detect explosives in baggage and cargo.
• Oxygen Biotherapeutics, a Durham company developing wound care treatments, announced it will ask shareholders for approval to reduce the number of its outstanding shares. The company hopes the reverse stock split will boost its share price, enable a switch to a major stock exchange and make it easier to raise cash.
• Cempra Pharmaceuticals, a Chapel Hill drug development company, said it has begun testing an antibiotic treatment for drug-resistant infections in patients. Cempra recently raised $46 million in venture capital.

NC Biotech Center gets ready for expansion

The N.C. Biotechnology Center has raised the money needed to build a $10.4 million expansion on its RTP campus.

The expansion has been planned for at least a year and private donors provided much of the cash needed to complete construction next year.

Donors included the Duke Energy Foundation and Biogen Idec. The Boston-based drugmaker, which has a production plant in the Triangle, provided $1 million.

Clinical Research Education Day

Free health screenings, food and a raffle promise to draw a crowd Sept. 12 at North Carolina Central University.

There’s a reason for all the goodies. Organizers want people to stay and listen – to speakers like Dr. Robert Califf, who heads Duke University’s Clinical Research Institute; Dr. Wendy Brewster, director of women’s health research at the University of North Carolina at Chapel Hill; and executives from Quintiles Transnational and PPD, two North Carolina companies that help drugmakers test new medicines.

Hosted by the Center for Information and Study of Clinical Research Participation, the public education workshops at NCCU are part of an East Coast campaign aimed at getting more people, particularly more minorities, interested in participating in clinical trials.

More about the Clinical Research Education Day here and a Q&A with Sandy Kennedy, whose job duties at Quintiles Transnational will be a topic at one of the workshops, here.