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.

But that’s exactly what a panel of experts did Monday at the RTI Fellows Symposium at the University of North Carolina’s Friday Center in Chapel Hill.

Personalized medicine – the idea of using gene-based information to individualize medical care – was one of eight hot research areas that RTI International’s scientific advisors recommended for further scientific scrutiny. Other areas addressed at the two-day symposium, the fourth since the inception of the RTI fellows program in 2002, include biofuels and the role computers play in accelerating innovation.

On the first day, personalized medicine attracted more listeners among the about 400 people who had registered for the symposium than any other topic.

The four members on the panel agreed that gene-based research, also known as genomics, and its offshoots, proteomics and metabolomics, have advanced medicine. The pursuit of personalized medicine has improved the understanding of diseases, reduced side effects from certain drugs and brought about new treatments.

But after about 20 years of research, the ‘omics are still far from being a crystal ball to assess a person’s risk for disease, said Eric Juengst, director of the Center for Genetic Research Ethics and Law at Case Western Reserve University School of Medicine in Cleveland, Ohio.

Predictive genetic risk assessment is rather like a weather forecast, said Juengst (photo at left). “We all watch it but we take it with a grain of salt.”

The idea of consulting the genome to improve on health care is alluring, said Howard McLeod, director of the UNC Institute for Pharmacogenomics and Individualized Therapy in Chapel Hill.

Prescription medicines approved to treat a particular disease generally work in only about half of all patients, said McLeod (photo at right).

A good number of patients don’t respond to certain medicines – 25 percent cannot activate the blood thinner Plavix, 10 percent don’t respond to tamoxifen, which reduces the recurrence of breast cancer – because of genetic reasons, he said.

Genetic differences among patients also require significantly different doses of Warfarin, a blood thinner that is similar to rat poison and just as toxic if taken incorrectly.

“We don’t really know how medicines work to the degree we need to know,” McLeod said. “It’s Yogi Berra pharmacology: We know what we know, but we don’t know what we don’t know.”

The ‘omics are helping to unravel some of the unknowns, said Susan Sumner, a chemist who works in the RTI Biomarkers and Systems Biology group.

Researchers have found metabolites – products of chemical reactions in cells – that help predict drug-induced liver injury, the predominant reason why experimental drugs fail. The metabolites can be found in urine samples.

Similarly, biomarkers in urine tests are early warning signs during pregnancy for premature labor, said Sumner (photo at left).

The technology is becoming available to delve deeper into what triggers disease and understand individualized risk factors for expensive, chronic diseases such as Alzheimer’s and diabetes.

Research centers advancing genomics, proteomics and metabolomics have sprung up and federal research funding is flowing to companies in pursuit of the $1,000 genome analysis per person. There’s even a bill before Congress that could give personalized medicine a role in the debate about health care reform.

The promise of personalized medicine is to reduce health care costs as technological advances make the ‘omics cheaper and faster. But embracing genetics in medicine too fast has its pitfalls, said Dr. Jim Evans, an internist, professor of genetics at UNC-CH and the editor-in-chief of the journal Genetics in Medicine.

Very little is known about how genes interacting with genes or with the environment can affect disease, said Evans (photo at left).

Sometimes, tests to screen for disease risks turn out to do more harm than good. A test to measure the amount of a protein called prostate-specific antigen, or PSA, as a tumor predictor is one such example, he said.

Sometimes, it’s not clear what the significance of certain genetic risk factors is. Researchers have found 19 genetic risk factors for Type 2 diabetes, but each has such a miniscule odd to cause the disease it becomes irrelevant.

Evans is a big believer in data that proves personalized medicine goes beyond the promise and actually promotes an outcome.

“It’s so seductive to believe that a good idea improves health,” he said. “But it’s really hard to prove it does.”

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.

Investors rushed to trade the stock after Salix announced results from two late-stage studies Monday that showed rifaximin  works better than placebo in treating non-constipation irritable bowel syndrome. Salix sells rifaximin for traveler’s diarrhea under the name Xifaxan.

About 12 percent of Americans suffer from irritable bowel syndrome, which can cause abdominal pain, bloating, constipation and diarrhea. IBS is not considered life-threatening, but it is difficult to treat, making it one of the most expensive gastrointestinal diseases in the U.S., according to an analysis in Nature Reviews Drug Discovery.

A handful of IBS treatments are on the market, but patients and doctors have been looking for more choices with fewer side effect.

Rifaximin is an antibiotic with minor side effects, including headache and constipation, and has the potential to replace sales Salix has lost since the end of 2007, when generic competition started pummeling its biggest seller, Colazal.

The company expected it will request regulatory approval of rifaximin for non-constipation IBS, the most common form of the disease, by mid-2010. Salix projected that treatments for non-constipation IBS generate about $2.2 billion in annual sales.

Shares rose as high as $21.34 on Monday and started trading above $19 Wednesday. The stock dropped below $19 in  November 2005.

Geography of innovation

President Barack Obama has asked Congress to appropriate $100 million in fiscal year 2010 to renew economic development efforts at regional innovation hot spots.

A report supports those efforts, saying that areas such as the Silicon Valley, an information technology cluster, and biotech clusters in Boston and the Research Triangle Park area, are critical components of national competitiveness.

The federal government already funds about $150 billion of research and development per year.

North Carolina’s biotech industry, which is concentrated in the Triangle, is considered the third largest by number of companies. But the Triangle is also home to information technology and medical device clusters that together created more than 5,000 jobs between 1998 and 2006, according to the report.

Deals and regulatory actions

Bayer CropScience added a research collaboration to other recent deals aimed at coming up with better genetically modified crop seeds.

The German company, which has its U.S. headquarters in RTP, will partner with Precision BioSciences of San Diego. The deal is the third in a row to improve Bayer CropSciences’ ability to compete in the GM seeds market.

In recent weeks, the company bought rights from Texas Tech to improve the fiber quality from cotton seeds and announced it would buy its RTP-neighbor Athenix.

More about why Bayer CropScience is dealing here.

Other company news:

• Cornerstone Therapeutics, a Cary company specializing in respiratory treatments, received approval to buy the rights to an antibiotic from Oscient Pharmaceuticals, a Massachusetts company that has filed for Chapter 11 bankruptcy.
• The Food and Drug Administration told Pozen that the Chapel Hill drug development company’s request to approve PN400, a painkiller that causes fewer stomach ulcers, is complete. The FDA notice triggered a $10 million milestone payment from British pharma giant Astra-Zeneca, Pozen’s partner. Pozen filed the request in June and the FDA is expected to rule on it in 2010.
• BioDelivery Sciences International will close its research laboratory in Newark and consolidate operations at corporate headquarters in Raleigh. All four positions in Newark will be eliminated to save about $1 million in operating costs per year. More about BDSI here.
• Shares of Icagen get a lift after a mid-stage study shows that the Durham drug development company’s experimental asthma drug eases allergy-related attacks.

Reality shows aim at preventing HIV spread

Family Health International, a Durham organization that aims to improve public health worldwide, is behind two reality shows to prevent the spread of HIV.

“Bongo Star Search” is a competition for would-be pop stars in Tanzania and “You’re the Man” is a competition that challenges stereotypes of what it means to be a man in Cambodia.

At least for the moment they are.

Icagen’s stock rallied Monday after the Food and Drug Administration gave Icagen the green light to start testing its epilespy drug in photosensistive patients. Until then, the FDA had had a partial clinical hold on the drug.

On Tuesday, the company reported it had narrowed its second quarter loss 36 percent to $2.4 million, or 5 cents per share, compared to a year ago. That beat analysts’ estimates of 8 cents per share.

Icagen, which said it laid off 10 percent of its staff of about 70 last month, has been on a roller coaster ride since it had to stop testing an experimental sickle cell treatment in 2007 after seven years of work. In the summer of 2007, Icagen got a second chance in form of a collaboration with drugmaker Pfizer that could be worth up to $1 billion. But by the beginning of 2009, Icagen’s stock was trading at about 50 cents per share and a large investor was getting restless.

Shares started trading at 76 cents Tuesday, having nearly doubled their value in two days.