Introduction
India's biotech budget
The government of India will allocate $1.7 billion to the Department of Biotechnology (DBT) over the next five years—a whopping 450% increase over the previous five years. And DBT, in a major departure, will spend 30% of its budget on innovative projects in partnership with industry. India has some 250 biotech companies, but only a few of them are investing significantly in R&D. That means that although "the existing scheme to promote innovation in small companies will be expanded, the new partnership would involve some of the biggest companies and advanced technologies," says Maharaj Kishan Bhan, DBT secretary. The department also has an ambitious plan to boost biotech research in universities and create 50 biotech 'centers of excellence' in India by 2012. There are certainly hurdles to be overcome, but Bhan is optimistic and says expanded PhD and post-doctoral programs in the country will create the necessary human capital. That effort should be helped by a massive $325 million, ten-year scheme by DBT to bring back expatriate Indian scientists by offering relocation packages. So far, the reaction from industry to the increased funding is muted. "It is a good move, but innovation cannot come by throwing money," says Krishna Ella, managing director of Bharat Biotech in Hyderabad, India, and chairman of the biotech committee of the Federation of Indian Chambers of Commerce and Industry. "Neither the companies nor the academics are geared up to absorb the funds, as we do not have enough biotechnologists." KSJ
Astellas' antibody splurge
Tokyo's Astellas Pharma sees the same rising value of antibodies as the rest of the world's pharma companies, and in late November it made its third move of the year in an attempt to build up its antibody capabilities: it announced it would purchase Agensys, of Santa Monica, California, for $387 million, with another $150 million tied to certain milestones, including filing investigational new drug applications and the initiation of a phase 2 study. Agensys has AGS-PSCA (Merck, of Whitehouse Station, New Jersey, is collaborating) aimed at prostate, bladder and pancreatic cancer in phase 1b, and it has identified 30 targets in 14 cancers. It has a license to the XenoMouse technology developed by Abgenix, now a unit of Thousand Oaks, California–based Amgen, and access to antibody-conjugate technology developed by Seattle Genetics, of Bothell, Washington. It also has a bank of patient-derived tumor and healthy tissues to help churn up targets through differential gene-expression profiling. Astellas, for its part, is building its antibody capabilities through outreach. In March it acquired a license to Tarrytown, New York–based Regeneron's VelocImmune mouse to generate humanized monoclonal antibodies and secured access that same month to Martinsried, Germany–based MorphoSys's phage display library. But shaping the Agensys buyout had specific hurdles, says Michael Braun, partner at New York-based Morrison & Foerster's, which advised Astellas in the deal. Among them were retaining Agensys employees "used to stock options and restricted stock as incentives," and trying to "maintain the imaginative spirit of [Agensys] scientists under a Japanese system more used to reports and structure," he says. BH
Celgene swallows Pharmion
The $2.9 billion takeover of Boulder, Colorado–based Pharmion by Celgene, of Summit, New Jersey, gives Celgene four marketed products, including Vidaza (azacitidine) for myelodysplastic syndromes (MDS), and a presence in hematological oncology. Celgene also gets full rights to Thalomid (thalidomide) for multiple myeloma and moderate-to-severe erythema nodosum leprosum. (Celgene had licensed rights to Pharmion in all areas other than North America, Japan and mainland China.) In 2004, the methylation agent Vidaza became the first drug cleared for marketing against MDS and is indicated for all subtypes. In 2008, Minneapolis-based MGI Pharma and SuperGen, of Dublin, California, are likely to offer survival data for competitor Dacogen (decitabine), another methylation agent approved for MDS in May 2006. Vidaza and Dacogen each sold around $34 million in the third quarter of 2007, and Christopher Raymond, analyst with Milwaukee-based Robert Baird, is one of the few who sees little upside for Celgene regarding Vidaza. "[The buyout is] a solid tactical move, but I believe it has a lot more to do with getting Pharmion out of the equation in Europe than it does with Vidaza, which turns into a pumpkin pretty soon," he says. Although Celgene had recently increased sales of Revlimid (lenalidomide), a thalidomide analog approved in late 2005 for a subset of low- or intermediate-1 risk MDS patients, data presented at the American Society of Hematology meeting in Atlanta in December showed Cambridge, Massachusetts–based Millennium's Velcade (bortezomid) performed well in multiple myeloma disorders. That's not good news for Celegene and neither is the prospect of generic Vidaza in the US in 2011. RO
New Jersey stem cell plan thrown out
Sarah J. Glover/Philadelphia Inquirer/MCT
Although the $450 million bond issue was defeated in his state, New Jersey Governor Jon Corzine, pictured here, remains supportive of stem cell research.
New Jersey's plan of spending $450 million in bonds to support stem cell research in the state was defeated in the November election. Although church-based activists and political opposition groups were vocal leading up to the vote, the thumbs down was seen as a message from taxpayers: resolve New Jersey's pressing financial problems first. The state's middle class already pays record high property and other taxes to service New Jersey's excessive debt. Although there is speculation that voters will see the issue on the ballot again, the lack of funds has left holes—in late October, Governor Jon Corzine broke ground on the $150 million Stem Cell Institute of New Jersey in New Brunswick for basic research. The legislature previously approved some $250 million in borrowed funds to build the institute and four other facilities, but after the vote, the governor is talking about reshuffling funds to allow at least the institute to go forward. Robert Hariri, CEO of Summit, New Jersey-based Celgene's Cellular Therapeutics unit, says that if put to a vote again, the public needs to be assured that researchers "are ultimately going to make good on the promise of turning the science into a medical tool." Funding should focus on bringing the most advanced stem cell products into clinical trials, Hariri says, so the population can see that "this is realistic." Celgene has a preclinical stem cell product derived from the less-controversial afterbirth materials designed to boost the effectiveness of bone marrow transplants. ARB
Selected research collaborations
AAV gene therapy restart
The US Food and Drug Administration lifted a hold November 21 on Seattle-based Targeted Genetics' gene therapy trial in 127 rheumatoid arthritis sufferers, in which a 36-year-old woman, Jolee Mohr, died last July. A National Institutes of Health panel, the Recombinant DNA Advisory Committee (RAC), finished its investigation into the death and said it lacked the assays and biological samples needed to completely rule out the therapy's role. Nonetheless, the committee's provisional conclusion (final votes are expected this month) was that Mohr's death was "primarily the result of an opportunistic infection, disseminated histoplasmosis, with subsequent bleeding complications and multi-organ failure." It concluded that Mohr's "apparent" risk factor for the infection was Humira (adalimumab, Abbott Labs, of Abbot Park, Illinois), an immunosuppressive rheumatoid arthritis drug that Mohr was taking. The RAC also suggested that in future trials, relevant biological samples and an assay need to be available. "It's vital that subsequent studies have the built-in capacity to measure the transgene product to explicitly distinguish it from what might be an already prescribed, systemically administered agent," says Howard Federoff, the executive dean of the School of Medicine at Georgetown University in Washington, DC, who chairs RAC. No assay exists to distinguish Humira from the gene therapy product in the trial, TNFR:Fc, which inhibits tumor-necrosis factor-
. RAC also called for investigators going forward to collect adequate samples of peripheral blood to sample for the presence of T-lymphocytes, which could indicate an immune response to the viral vector in gene therapy products. MW
IP and iPS cells
Following the generation of human pluripotent stem cells from skin cells, officials from Wisconsin Alumni Research Foundation (WARF, Madison) say they will make the technology available to researchers without a license. (Although it's too early for patents to be issued on the discovery, several groups, including WARF, are likely to file.) Wisconsin's James Thomson led one of two groups that published the derivation of induced pluripotent stem (iPS) cells, the other being University of Tokyo's Shinya Yamanaka (see p. 59). WARF's approach to iPS cells signals a change of heart, compared to its licensing practices for human embryonic stem (ES) cells. Out of necessity, human ES cells were developed using private money, so WARF granted exclusive licenses to the funder, Geron, of Menlo Park, California, says Carl Gulbrandsen, managing director of WARF. And because the cells were derived from material obtained from donors, restrictions were placed on the use of the cell lines by licensees. In contrast, work on iPS was federally funded and uses technology available in many cell biology labs. Nonetheless, how the US Patent and Trade Office (USPTO) will handle the patents is unclear. Jeanne Loring, stem cell researcher at the Burnham Institute in La Jolla, California, predicts the USPTO will approach these stem cell patents differently from how they have in the past. "They won't allow patenting of every cell characteristic," as they did with the hES cells, she says. "It's a new ballgame." LD
Pfizer acquires Coley
Although Pfizer's $8-per-share offer for Wellesley, Massachusetts–based Coley Pharmaceuticals, disclosed November 16, was a hefty premium over the stock's closing price of $3 the preceding day, it is just half the company's initial public offering (IPO) price of $16 per share in August 2005. New York-based Pfizer's takeover offer implies an enterprise value for Coley of $164 million. Coley was an early pacesetter in the race to find modulators of a class of immune system sensors called Toll-like receptors (TLRs), which trigger host responses to microbial pathogens. It netted $111 million in its IPO and, in the same year, entered an eye-catching deal with Pfizer potentially worth more than $500 million in upfront and milestone payments. However, the focus of that deal, a TLR9 agonist called PF-3512676 (previously ProMune), failed in two phase 3 cancer trials last June. Coming after an earlier setback with a different TLR9 agonist, Actilon, which had been in development for hepatitis C virus (HCV) infection, the reversal dented Coley's ability to earn near-term milestone payments and product royalties. Although the field has seen other disappointments recently, the fact that Pfizer is committed to its relationship with Coley is significant, says Brian McCarthy, senior vice president of equity research at Merriman Curhan Ford in San Francisco. "We actually see the whole buyout as validation of this space," he says. CS
New product approval
Written by Ann Roberts Brice, Laura DeFrancesco, Brady Huggett, KS Jayaraman, Randall Osborne, Cormac Sheridan & Meredith Wadman.
