QDIS Blog

Another major deal. Cardinal Health, who I have done work with in the past, is selling their pharmaceutical services division to the private investment group The Blackstone Group for $3.3 billion!

PharmaLive: Cardinal Health to Sell Pharmaceutical Technologies and Services Segment to The Blackstone Group for $3.3 Billion

What is interesting is that this process took less than two months to put together!! That it extremely quick given the scale of the sale.

This is interesting and Cardinal says it will allow them to focus on their core services to hospitals and pharmacies. You may remember that Cardinal was responsible for freezing 500,000 doses of flu vaccine and thus making them useless back in October that were made by Novartis. Cardinal Health is also one of the announced manufacturer of Tamiflu for Roche.

I think the price in this case may be about right sine the unit has $1.8 billion in annual revenue. However t is hard to factor in the intangibles such as the failure to portly handle the flu vaccine and a class 1 recall of electronic infusion pumps in Aug of last year.

Other Resources
Cardinal Health to Sell Pharmaceutical Technologies to Blackstone (Cardinal Health press release).

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Replidyne is testing its antibiotic Faropenem in phase III clinical trials against Ketek and placebo for treatment of acute exacerbation of chronic bronchitis )AECB). However, due to the joint Advisory Committee meeting of the FDA’s Anti-Infective Drug and Drug Safety and Risk Management committees where concerns about the use of Ketek for this indications. This means they will stop the trial, look into eliminating the Ketek arm and then restart the trial after making changes to the number of patients to be enrolled and possibly considering another comparator.

Faropenem Phase III Clinical Trial Stopped to Consider Exclusion of Ketek Comparator

Replidyn has already received a non-approvable from the FDA back in Oct 2006.

U.S. Food and Drug Administration Issues Non-Approvable Letter for Faropenem

What is somewhat interesting in this respect is that it seems to reflect a change in FDA policy regarding superiority studies in particular with antibiotics and especially for the AECB indication.. In the past, the FDA has not required this for antibiotics and the studies done on Faropenem were non-inferiority designs. Replidyne may be getting caught in the changes where the FDA is now looking into placebo controlled studies for antibiotics. This new study which is being stopped to consider exclusion of Ketek, was planned as a placebo controlled superiority study. However, now the question is do they continue with the comparator Ketek. I think it likely that they will exclude the Ketek arm and likely choose another comparator. This means even more delays.

I do feel for Replidyne and think they have gotten caught up in the changing climate and this is likely not their fault. My concern though is that it may mean even more companies do not get into development of anti-infectives, an area of vital need now in my opinion.

Other Resources
Faropenem - Wikipedia, the free encyclopedia
Replidyne (page on Faropenem Medoxomil)Zoom structure
CID 636379 — PubChem Compound Summary

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Forbes recently had an article exclaiming that big pharma has a huge “black hole” as many blockbuster patents expire in the coming years, particularly from 2010 to 2013 when ~28% of current sales will be subject to generic competition.

Big Pharma’s Black Hole - Forbes.com

First of all, being an amateur astronomer, the black hole analogy really isn’t accurate. Black holes suck in everything including light and nothing escapes (okay I know that isn’t totally true but lets ignore that for now). This problem isn’t related to everything getting sucked in and crushed into nothingness. If they mean it in the more generalized usage as in having a gap that needs to be filled then maybe it is more appropriate.

I’m not a big fan of the “sky is falling” mantra. While it is obvious there are large issues looming I think these can be overcome if people are willing to focus on long term issues. However, and I’ve said this before, merging to acquire a pipeline is not the answer. I am much more in favor of partnerships or deals although those to can be dangerous. Just look at Icos and Lilly; it made better financial sense for Lilly to just purchase Icos rather than continue under the terms of their agreement.

I really think that big pharma needs to get out of the mindset of developing blockbuster drugs that only have over $1 billion in sales. I’d like to see them take advantage of genomics to better identify which patients may benefit the most from a given drug. I think that more post-launch marketing efforts should be undertaken to better understand how certain genetics differences make drugs work better for certain individuals.

Another factor that I think gets mentioned but not thoroughly explored is that of the lack of new drug applications. It gets mentioned but no one really goes further and asks why that is the case. I think there is some validity to the argument that the low fruit has been picked and new targets are more difficult. However, too many times, this is used as a prelude to bashing so called me-to drugs. As you know, I don’t subscribe to that school of thought and believe there is a need for several drugs in a given category in order to have competition and since all drugs don’t work well for everyone, there needs to be choice.

My argument concerning why there seems to be a lack of new drug applications, which doesn’t get mentioned often in the coverage of this issue, is that large corporations tend to stifle innovations. As big pharma gets bigger and bigger, I think the ability for creative individuals to come up with cutting edge solutions is greatly diminished. These larger organizations tend to be more risk adverse and not willing to take chances with projects that may not generate a return. However, many breakthrough and paradigm shifts require this sort of risk taking in order to come to fruition. I’ve worked for both large and small pharma and can tell you there is a world of difference in the approach to innovation and risk. For me the future of drug development s going to come from smaller organizations willing to try what others dismiss out of hand.

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Eli Lilly has announced that it is making major changes to it manufacturing operations.

PharmaLive: Lilly Announces Strategic Changes to its Global Manufacturing Operations

They are stopping construction of an insulin manufacturing plant in VA and are offering voluntary exit program for up to 250 employees on the small molecule program at their facility in Lafayette, IN which currently employs 1,000 folks.

I would say that I think Lilly really missed the boat several years back when they were touting their Humulin insulin. My wife is diabetic and so I appreciate their wanting the highest quality and best product. However, I think that they missed the convenience aspect that Novo Nordisk picked up on wit hthe whole insulin pen concept.

Like some other big pharma companies, Lilly is choosing to concentrate on the high margin biotech products ad plans on launching one new biological product each year starting in 2010. This is a trend that I definitely think will continue espoecially for any of the big pharma that have a major biologics program. This includes Bristol-Myers Squibb, Schering Plough, and Lilly. I personally think this is a bad idea and think a balance would be better in the long run. Dumping small molecules to concentrate on the high margin biologics is short sighted,. I am convinced there will eventually be a biogenerics industry(hopefully sooner rater than later) and that while it might be possible to get the high margins for biologics for some time, those will eventually degraed especially with all the consumer and political pressure on the pricing of medicines.

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Businessweek has an article about merger mania in the pharmaceutical industry, something I’ve been talking about for months.

More Merger Mania Ahead For Pharma

It is a good article and comments on several major players including Bristol-Mters Squibb and Wyeth. At a luncheon at a JPMorgan (JPM ) Healthcare conference in San Francisco recently, 60% of responders said BMS will be bought up if it loses its battle concerning Plavix which is a $3 billion year product for them. I mentioned this in a posting earlier before I had read this article.

Also, Wyeth was mentioned as another possible take-over target that I hadn’t considered. They are said to have over 60 compounds in development and the stock price is depressed right now although they have now settled their long-standing fen-phen lawsuits. I’m not sure what will happen.

I do think that merging simply to acquire a pipeline is short-sighted. I’ve stated several times here that I think the most innovative and cutting edge products tend to come from smaller companies willing to take risk. However, when they get purchased by a large pharma, it tends to suppress this innovation and many times key players are lost because they don’t want to be part of a larger slow moving organization. Again, killing the goose that lays the golden egg comes to mind.

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The announcement of Pfizer laying off 10,000 people got me to thinking about recent big pharma who have also had layoff recently.

• Bayer AG to lay off 800 US Workers
• Eli Lilly to reduce its workforce by 6%
• Eli Lilly Abandons Prince William Project - washingtonpost.com
• Lilly Buyout to Cut All Icos Jobs
• Merck to Cut 11% of Staff, Close or Sell Five Plants: 7,000 Jobs to be Cut

Here are others I expect to make announcements about layoffs and downsizing in the first six months of 2007.

• Bristol-Myers Squib and Sanofi-Anvetis depending on the outcome of the decision on generic version of plavix.
• GlaxoSmithKline and Sanofi-Aventis will likely lay off sales force to keep up with other pharma companies

If you know of others that I’ve overlooked, pleas leave a comment.

Unfortunately, I think this is going to continue to be an issue for the foreseeable future. The drive to acquire pipelines resulting in mergers which then leads to layoffs and downsizing. It use to be that you could get a job with a major pharmaceutical company and work for them for years. Now, there is a constant threat of not having a job in two weeks. And it continues to amaze me how upper management can continue to complain about lack of loyalty of their employees. How do you expect employees to be loyal if they don’t know if they will have a job two week from now?!

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One of the omnipresent tasks in organic chemistry is how to work up a reaction. One of my pet peeves is the many articles that say something along the lines of “worked up in the usual manner” or “extracted with toluene” and no further information is given such as the amount or number of times the extraction was performed. It was interesting to me to see an article talking about the extraction process and how the extraction of not only the product, but also the original reaction solvent is often of immense import in downstream processing such as washing or crystallization.

Removal of Reaction Solvent by Extractive Workup: Survey of Water and Solvent Co-extraction in Various Systems (abstract) Delhaye, L., Ceccato, A., Jacobs, P., Kottgen, C., and Merschaert, A.
Org. Process Res. Dev., 11, 1, 160 - 164, 2007, 10.1021/op060154k

This article looks at a variety of reaction solvents; DMSO, DMF, NMP, DMAc, TMU, DMI, THF, 1,4-dioxane, diglyme, and acetonitrile and how they perform with extraction solvents such as toluene, EtOAc, iPrOAC, 1-chlorobtuane and heptane in aqueous solutions such as water and salt water.

The article is well wroth reading and noting for future use.

This is in the first issue of the journal for this year and is available to everyone. Typically for some ACS journals the first issue of the year is free and available to everyone.

Removal of Reaction Solvent by Extractive Workup: Survey of Water and Solvent Co-extraction in Various Systems (pdf) or alternative html

Here is the Supporting Info.

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Well it was inevitable with the number of mergers Pfizer has gone through in the last few years that major changes were going to occur.

PharmaLive: Pfizer Announces Priorities to Drive Improved Performance, Position Company for Future Success and Enhance Total Shareholder Return

This ariclefrom PR Newswire is basically a PR release that attempts to paint the picture in the brightest possible terms. Bloomberg on the other hand had a different sort of title for its coverage.

Pfizer to Cut Up to $1 Billion in Costs, Fire 10,000

This means Pfizer will be laying off 10% of its workforce worldwide! This is in additional to the announced lay-offs of their sales force announced late last year. They are also closing plants in Brooklyn, NY; Omaha, NE, research operations in Ann Arbor and Kalamzoo, MI and in Nagoya Japan and Ambroise, France. THis will bring the number of plants from 93 in 2003 to only 48 by 2008 or almost 50% decrease in the number of plants.

It is sad to me to see loyal employees looked at as an expense rather than an asset. And then to add insult to injury, many times, CEO’s get paid exorbitant bonuses for getting rid of employees aka cutting costs.

I truly wish those at Pfizer who will soon be looking for another job the best.

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One of the omnipresent tasks in organic chemistry is how to work up a reaction. One of my pet peeves is the many articles that say something along the lines of “worked up in the usual manner” or “extracted with toluene” and no further information is given such as the amount or number of times the extraction was performed. It was interesting to me to see an article talking about the extraction process and how the extraction of not only the product, but also the original reaction solvent is often of immense import in downstream processing such as washing or crystallization.

Removal of Reaction Solvent by Extractive Workup: Survey of Water and Solvent Co-extraction in Various Systems (abstract) Delhaye, L., Ceccato, A., Jacobs, P., Kottgen, C., and Merschaert, A.
Org. Process Res. Dev., 11, 1, 160 - 164, 2007, 10.1021/op060154k

This article looks at a variety of reaction solvents; DMSO, DMF, NMP, DMAc, TMU, DMI, THF, 1,4-dioxane, diglyme, and acetonitrile and how they perform with extraction solvents such as toluene, EtOAc, iPrOAC, 1-chlorobtuane and heptane in aqueous solutions such as water and salt water.

The article is well wroth reading and noting for future use.

This is in the first issue of the journal for this year and is available to everyone. Typically for some ACS journals the first issue of the year is free and available to everyone.

Removal of Reaction Solvent by Extractive Workup: Survey of Water and Solvent Co-extraction in Various Systems (pdf) or alternative html

Here is the Supporting Info.

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I’ve written before about MeTHF and though I’d pass along some information I recently came across in the journal Org. Proc Res and Dev.

Solvent Applications of 2-Methyltetrahydrofuran in Organometallic and Biphasic Reactions (abstract)
Aycock, D.F. Org. Process Res. Dev., 11, 1, 156 - 159, 2007, 10.1021/op060155c

Luckily for most, this is in the first issue of the year and is avaiable to everyone. Typically, it is for subscribers only. Free full aticle link Solvent Applications of 2-Methyltetrahydrofuran in Organometallic and Biphasic Reactions (pdf) or an alternate html.

I should point out though that the article is by David F. Aycock who works for Penn Speciality Chemicals and is a primary supplier of MeTHF.

There are several factors that make it such an interesting solvent.

• Unlike THF, it is not completely water miscible and does not readily form emulsions or rag layers.
• Its water solubility is low, 4 g per 100 g water.
• Moderate boiling point of 65.7 °C.
• Available from readily renewable resources (2-furaldehyde from corncobs).
• Forms azetropes with several solvents including water (10.6% water).
• Three times more stable than THF to 5N HCl at 60 °C.
• About the sme tendency as THF to form peroxides.
• Works well for forming Grignard reagents. Can form much more concentrated solutions than is possible with THF.
• Is a suitable replacement for dichloromethane.
• Effective for extracting polar alcohols such as 2-propanol from water. Two extractions with equal volumes extracted 94% of 2-propanol from water. Only 68% was removed using toluene.

On the downside though, this solvent is significantly more expensive than THF. Penn makes the argument though that you don’t have to use an extraction solvent that you must use with THF or that you can make more concentrated solutions of Grignard and so therefore use less solvent.

It is a good article and well worth reading and noting for future use for all chemists.

You can also view other articles in this free issue of Org. Proc Res. & Dev.

Other Resources

Products”>Penn Specialty Chemical Inc. > Products MeTHF
Methyltetrahydrofuran: How to Recover and Dry MeTHF Batchwise (pdf)
Penn Specialty Chemicals Inc.
ChemExper - catalog of chemical suppliers, physical characteristics and search engine (methyltetrahydrofuran)

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