GlaxoSmithKline, Sanofi-Aventis: Rx for When Drug Patents Expire
Targeting Rare Diseases
GlaxoSmithKline (GSK) and Isis Pharmaceuticals (ISIS) announced a new strategic alliance that will use Isis's antisense drug platform to seek new treatments for rare and serious diseases. Antisense therapies block the production of disease-causing proteins at the genetic level through the ribonucleic acid (RNA) that's involved in their creation. This alliance provides GSK with access to Isis's expertise in drug discovery and development of RNA-targeted therapeutics.
The deal builds on GSK's recent strategy to pursue rare diseases as it prepares for the patent cliff, when major drugs go off patent. Just last month, it launched a new specialist unit to research and develop medicines for rare diseases. GSK shares rose almost 1% in late-morning trading, while ISIS shares gained about 8%.
Under the agreement, Isis will receive $35 million in cash upfront. It will also get possible payments totaling nearly $1.5 billion should all six programs in the antisense platform be successfully developed and commercialized.
This isn't GSK's only news today. The London-based company also received European approval for its prostate drug, Duodart, a combination of two drugs -- dutasteride and tamsulosin. Duodart is indicated for the treatment of moderate-to-severe symptoms of an enlarged prostate, a condition that's increasingly common for men as they age.
An Alliance and a Restructuring
Across the channel, Paris-based Sanofi-Aventis (SNY) announced today it agreed to develop blood-sugar monitoring systems with AgaMatrix, a privately held U.S. company. The pair will codevelop diabetes-monitoring solutions, which will be exclusive to Sanofi-Aventis. The monitoring systems will complement Sanofi's insulins, Lantus and Apidra, and be marketed as integrated solutions.
Offering full-service package solutions is another strategic goal of drugmakers in preparation for the changing health-care environment, particularly in the U.S. Sanofi-Aventis's second announcement today also shows a strategy shift. The drugmaker says it will invest 150 million euros ($201.4 million) to restructure its facilities and alter them from chemical to biotechnology and vaccine manufacturing, including a new plant by 2014.
Sanofi-Aventis explains that this prepares it for a production decline expected after patent expirations of several major drugs derived by synthetic chemistry. The project includes training employees for work in the new field, as well as relocation help if needed.
Why These Stocks Moved
Meanwhile, ArQule (ARQL) shares doubled today in early morning trading to around $7, from their $3.50 close on Tuesday. Investors were reacting to news that ArQule's lead drug, ARQ 197, improved by 66% the median progression-free survival (PFS) of patients with advanced non-small-cell lung cancer. This cancer has been particularly hard to treat.
In the Phase II trial, the PFS of patients receiving ARQ 197 in combination with erlotinib (the standard treatment) was 16.1 weeks, compared with 9.7 weeks for patients receiving erlotinib only. But ArQule adds that the PFS difference between the two groups didn't achieve statistical significance -- the data had to be adjusted to reach statistical significance.
For Vivus (VVUS), the news wasn't as good. It said today it will cease development of FemPharm's Luramist -- an experimental treatment for women with impaired sexual function due to low testosterone. The company found out that to be approved, the product would have to go through significant long-term safety requirements. VVUS shares fell over 1.5% on the news.
Finally, Japan's Astellas Pharma says it has extended its $52-per-share tender offer for OSI Pharmaceuticals (OSIP) to Apr. 23, from the previous deadline of Mar. 31, so OSI shareholders can have more time to consider the offer. The terms of the $3.5 billion offer have not changed. Meanwhile, Astellas will also have time to look at some information it's receiving from OSI under a confidentiality agreement reached a few days ago.