VentureBeat

TODAY’S HEADLINES:

• Amira Pharma strikes GSK partnership on lung, heart drugs worth up to $425M (release)
• Wolters Kluwer Health takes stake in Logical Images (release)
• Gentiva Health acquires Home Health Care Affiliates for $55M (release)
• Compuware buys Hilgraeve to upgrade healthcare IT (release)
• Touchstone Health appoints Michael Muchnicki CEO (release)
• Australia’s Xenome names Ian Nesbit as CEO (release)

Amira Pharma strikes GSK partnership on lung, heart drugs worth up to $425M – Amira Pharmaceuticals, a San Diego biotech focused on drugs for lung and heart problems, struck a partnership with GlaxoSmithKline potentially worth $425 million in upfront and milestone payments.

Amira is developing anti-inflammatory drugs based on its understanding of immune-system elements called eicosanoids. These fatty molecules are produced by white blood cells when foreign threats are perceived, triggering several different types of inflammation, which can damage healthy tissue when it’s prolonged by allergies or autoimmune disease.

Diseases such as asthma, chronic obstructive pulmonary disease, atherosclerosis, arthritis and psoriasis are often the result. Amira aims to defuse the underlying inflammation caused by eicosanoids by inhibiting “upstream” molecules that are necessary for their production.

The company’s two lead candidates have entered early stage, phase I human tests. One compound targets asthma; Amira hasn’t identified which diseases the second drug is being tested in.

Under the partnership, GSK will have rights to develop and commercialize all of Amira’s compounds in its current development program, which are technically known as FLAP inhibitors (FLAP standing for 5-lipoxygenase-activating protein). In return, Amira will receive an undisclosed upfront payment, milestones related to development and potential tiered royalty payments.

Wolters Kluwer Health takes stake in Logical Images – Logical Images, a Rochester, N.Y., developer of medical image-analysis tools, sold a minority equity stake to Wolters Kluwer Health, a healthcare-information company in Conshohocken, Pa. The companies didn’t announce terms of the deal.

Logical Images makes visual healthcare tools for physicians and patients. Its products include VisualDx, a diagnostic tool designed to help physicians identify some 900 visually identifiable diseases, and VisualDxHealth, which does roughly the same thing for interested consumers. The companies said they intend to integrate VisualDx with Wolters’ product Clin-eguide, a “decision support” tool for physicians.

TODAY’S HEADLINES:

• Cancer stem-cell co. OncoMed strikes GSK partnership worth up to $1.4B (release)
• Kosmix pulls in $10M for health, lifestyle search (release)
• CDI Bioscience pulls in $3M for protein-production improvements (release)
• UroMedica takes in $7M for incontinence devices (VentureWire, sub req’d)
• Draths raises $2.5M for flu drugs (PE Hub)

Cancer stem-cell co. OncoMed strikes GSK partnership worth up to $1.4B – Redwood City, Calif.-based OncoMed Pharmaceuticals, a biotech founded to target and destroy the “cancer stem cells” that researchers believe may lurk at the heart of every tumor, struck a major partnership with GlaxoSmithKline to discover and commercialize new cancer drugs based on OncoMed’s technology.

The deal allows GSK to license up to four of OncoMed’s monoclonal antibody drugs that are directed at multiple cancer stem-cell targets. In turn, OncoMed gets an undisclosed initial payment, an equity investment, and milestone payments of up to $1.4 billion, plus double-digit royalties on any marketed products. The arrangement includes OncoMed’s leading product candidate, OMP-21M18, which is scheduled to begin human testing this year.

Cancer stem cells are, like most stem cells, thought to be progenitor cells that give rise to a diverse population of other cell types. In this case, however, the cancer stem cells theoretically keep tumors alive by constantly producing replacement tumor cells as they are killed off by chemotherapy, radiation or the body’s defenses. Cancer stem cells, in fact, may explain why tumors return so easily after surgery or chemotherapy, since if even a few stem cells survive, they can easily recreate the tumor.

CDI Bioscience pulls in $3M for protein-production improvements – CDI Bioscience, a Madison, Wisc., biotech aiming to improve the efficiency of genetically engineered cells in the production of biotech drugs, raised $3 million in a first funding round. Battelle Ventures and Innovation Valley Partners provided the funding.

CDI has developed a process that forces bioengineered cells into a “senescent” state, which CDI claims is characterized by greater energy production (in terms of increased numbers of mitochondria) and increased protein synthesis and output. The company claims that cells “shifted” into senescence routinely produce three to seven times the amount of engineered protein — the output that biotechs purify into drugs — than their unshifted counterparts.

Featured companies: Cerus, LabNow, Reliant Pharmaceuticals

UPDATED: Expanded items on Reliant Pharmaceuticals and Cerus.

GSK acquires Reliant Pharma for $1.65 billion — And then there were none. Reliant Pharmaceuticals, a Liberty Corner, N.J., specialty pharma that filed for an initial offering back in August, has instead decided to sell itself to GlaxoSmithKline for the eye-popping sum of $1.65 billion. The release is here. The acquisition news comes just days after doppelganger Reliant Technologies abandoned its own IPO bid (see our coverage here).

Although that sum is pretty large, it’s a mere 18 percent premium over the $1.4 billion market capitalization Reliant Pharma would have fetched had it priced at the top of its expected per-share range at $27. As we noted earlier — see our previous coverage here and here — Reliant is kind of a mixed bag insofar as specialty pharma companies go. It yanked an earlier attempt to go public back in 2005, and remains unprofitable despite pulling down $360 million in revenue for the first nine months of this year.

Reliant sells four unrelated cardiovascular drugs, the most significant of which is Lovaza, an omega-3 fatty-acid pill for people with high levels of triglycerides. Although GSK touts it as the only omega-3 supplement “clinically proven” to reduce triglyceride levels in adults with high triglycerides, it’s kind of hard to imagine that this really sets it apart from all the other omega-3 supplements you can find on the shelves of your local drugstore or supermarket. (Here at Chez Hamilton, we take the Costco house brand fish-oil supplement, which is plenty high in omega-3s, even if it hasn’t been “clinically proven” to reduce triglycerides. For Reliant’s song-and-dance as to why Lovaza is superior to fish-oil supplements, click here.) Yet Lovaza is exactly what GSK touts as its reason for dumping a billion-plus bucks of its shareholders’ money on this company.

Don’t think that Reliant has a secret weapon in its labs, either –because, you know, Reliant doesn’t really have labs. Like most specialty pharmas, it’s a bottom-feeder, acquiring drugs that no one else wants or can find a good use for. That can be a perfectly good business, and there’s no question that Reliant’s shareholders have done well in this transaction, but no one should mistake what companies like Reliant do for actual innovation. As for why GSK thinks this company is so valuable — well, chalk it up to desperation and the madness of crowds.

Cerus spins out venture-backed immunotherapy unit — Concord, Calif.-based Cerus is spinning off its cancer-vaccine program into a new, and as-yet unnamed, venture-backed company. The release is here.

Cerus will focus its own efforts on its Intercept blood-safety system, which theoretically neutralizes viral and bacterial pathogens in donated blood using a small molecule that binds to DNA or RNA and “cross-links” the molecules, rendering them incapable of replication. Intercept has had tough sledding in the U.S., but is approved in Europe.

Cerus didn’t identify backers of the new immunotherapy company, although it said David Cook and Thomas Dubensky have joined it as CEO and chief scientific officer, respectively. Cerus will retain a 16 percent interest in the new company, and is eligible for milestone payments of more than $90 million, plus royalties, should any of the new company’s vaccines pay off.

OTHER HEADLINES OF NOTE:

• Cerus spins out venture-backed immunotherapy unit (release)
• LabNow receives $20M for AIDS blood-analysis device (release)

(UPDATED: See below.)

Vaccine developer Protein Sciences is all over the blogosphere today (see, for instance, items on Pharmalot and the WSJ health blog), thanks to a breathless Bloomberg piece on the little Meriden, Conn., biotech. According to Bloomberg reporter John Lauerman’s article, Protein Sciences is poised to vanquish establish flu vaccines from Big Pharma giants Novartis and GlaxoSmithKline, in an interesting case study of what happens when a quote-worthy biotech executive catches the ear of a reporter eager for a new story line.

From Bloomberg:

GlaxoSmithKline Plc and Novartis AG, two of the world’s biggest vaccine makers, may have bet on the wrong technology in the race to develop a better flu shot.

The drugmakers are building U.S. factories to grow influenza virus in animal cells as an advance over the decades- old technique of making flu shots using chicken eggs. Now a small, privately held biotechnology company may leapfrog ahead of them with a more advanced method using DNA.

That company is Protein Sciences, which plans to use genetic engineering — technically called “recombinant DNA” — to produce influenza surface proteins from genes inserted into insect cells. The company’s chief operating officer, Manon Cox, scoffed at the traditional vaccine makers, telling Bloomberg that even their newer animal-cell technology “is an amazingly stupid investment to make for the future…. It’s as if we’re still living 100 years ago and recombinant DNA was never developed.”

The background: Flu vaccines are traditionally time-consuming and laborious to produce, since the most widely-used vaccine consists mostly of proteins harvested from inactivated flu virus, requiring mass quantities of virus. Until recently, the most reliable way to culture the virus was to grow it in vast collections of sterile chicken eggs, a 60-year-old process that takes about six months from start to finish. In the past few years, big vaccine makers like GSK and Novartis have been moving toward growing the virus in mammalian cell cultures, a much faster process than the old chicken-egg technique, although it’s not yet in widespread use.

Generally speaking, injecting people with a mixture derived from the inactivated virus immunizes them against infection by the real, live virus. A more recent intranasal vaccine developed by MedImmune — soon to be part of AstraZeneca — uses attenuated live flu virus to create the same effect.

Enter Protein Sciences and Novavax, of Malvern, Pa., which produce immunizing proteins directly, without the intermediate step of growing cultures of live virus. Using recombinant DNA, Protein Sciences inserted the genes for influenza surface proteins called hemagglutinins into insect cells, which then obligingly pump out zillions of hemagglutinin proteins when cultured. Ideally, injecting people with these proteins will also protect them against actual infection.

Recombinant production offers a number of advantages even over cell-cultured virus production. It’s fast and efficient, for one thing, and tinkering with the inserted genes can yield new vaccines relatively quickly. Both Protein Sciences and Novavax aim to produce vaccines against a possible avian flu pandemic, should that virus ever acquire the ability to pass between people.

On the other hand, this sort of vaccine — technically known as a “subunit vaccine” because it consists only of viral pieces — has some drawbacks as well. Although researchers have been working on subunit vaccines for well over a decade, only two have so far proven themselves, for typhoid and hepatitis B. In general, subunit vaccines tend to produce weaker immune responses than those derived from whole virus, which may reflect the possibility that recombinant proteins don’t always retain the same shape as their natural counterparts.

In the case of Protein Sciences, its recombinant flu vaccine consists solely of hemagglutinin proteins, whereas traditional vaccines also incorporate a second flu protein called neuraminidase — not to mention whatever other viral remnants survive the chemical centrifuging process that harvests the surface proteins in the first place. (See, for instance, the production process described in this PDF link to the package insert for Novartis’ Fluvirin.)

All of which is to say that it’s a bit soon to declare recombinant subunit vaccines victorious over the traditional version. A working recombinant flu vaccine would unquestionably be a great step forward for public health, but the evidence really isn’t there yet. Protein Sciences, for instance, conducted a large study of its vaccine — which goes by the contrived name FluBl0k (yes, that’s a zero in place of the letter “O”) — in 460 volunteers during the 2004-2005 flu season and says a high dose of FluBl0k “showed 100% protective efficacy against laboratory confirmed influenza,” but hasn’t yet published those results. An earlier study showed that FluBl0k was more effective in raising certain antibody levels than traditional flu vaccine, but didn’t test its efficacy against actual infection. (Read that study in PDF form here.)

UPDATED: Turns out there’s another reason to at least be cautious about Protein Sciences’ technology and its claims. In the early 1990s, the company — then known by the name MicroGeneSys — was developing an HIV subunit vaccine called VaxSyn that it wanted to test in human trials. When the NIH rejected its application, MicroGeneSys hired a lobbyist and got Congress to earmark $20 million for the trials in the Pentagon budget — a hugely controversial move at the time. In 1996, the resulting Army-run trial of VaxSyn showed “no clinical improvement that could be attributed to the vaccine.”

To be fair, it appears that the company’s management has turned over completely since those days. On the other hand, this saying is always worth bearing in mind.

Flip switch for stem cells – Three research teams reported a technique for “reprogramming” skin cells into embryonic stem cells, those primordial bits of protoplasm that can propagate themselves indefinitely and, under the right conditions, transform themselves into any type of cell in the body. Deriving embryonic stem cells normally requires destroying an embryo — the main reason research with the cells remains limited, as does federal support for the work.

Teams from Kyoto University, MIT and a Harvard-UCLA collaboration all confirmed a report last year out of Kyoto that skin cells could be reprogrammed by implanting four genes that produce proteins called transcription factors, which control the effects of other genes. Adding those four factors kicked off an intracellular chain reaction that reverted the skin cells to a primordial, “pluripotent” state characteristic of embryonic cells.

There are, of course, a number of caveats, the most significant of which is that the work so far has only succeeded in mouse cells. Extending it to human cells may be tricky, in part because they will likely require additional transcription factors. What’s more, at least one of the transcription factors used in the mouse experiments appears to contribute to cancer; so may the type of virus used to transfer the transcription-factor genes into skin cells. As a result, it’s not yet clear whether the embryonic stem cells produced this way could be used to help regenerate damaged tissue or organs in humans, such as dopamine-producing neurons for Parkinson’s patients or insulin-secreting pancreatic cells for diabetics. All that said, it’s a very encouraging step forward, both in terms of advancing understanding of stem-cell biology and the potential for altering the ethical landscape for the work.

For more, see the WSJ and the NYT.

The trials of Avandia, continued — The fracas over the controversial diabetes drug continued to throw shrapnel in all directions, leaving almost no one unscathed. Avandia’s maker, GlaxoSmithKline, published interim data from a large trial of the drug in the New England Journal of Medicine and touted it as evidence of the drug’s safety — only to find it accompanied by three editorials nitpicking the data and arguing that the data did little to allay doctors’ concerns. In congressional hearings today, a diabetes expert said he was berated by a company official and threatened with a lawsuit for raising questions about Avandia’s safety several years ago. Then the FDA commissioner told Congress that the agency would require strict new warning labels on Avandia and a similar drug.

The FDA, meanwhile, faced charges that one of its drug-safety officials was reprimanded after earlier recommending exactly those warnings for Avandia. And congressional Republicans went after Cleveland Clinic cardiologist Steven Nissen, who first raised the alarm about Avandia almost three weeks ago, suggesting that he had colluded with Democrats to embarrass the FDA and to enhance his chances of one day becoming FDA commissioner himself. As if all that weren’t enough, the NYT also asked if GSK’s efforts to promote Avandia to African-Americans may be backfiring.

Whew.

In research, where you stand depends on who’s paying the bills – An unusual report in the journal PLoS Medicine found that research studies sponsored by drugmakers were 20 times more likely to favor the companies’ products than trials with no disclosed funding source. Conclusions drawn by the research scientists involved — apart from the data itself, that is — were 35 times more likely to favor a sponsor’s drug, the PLoS Medicine study found.

The study looked at nearly 200 published trials of the cholesterol-lowering drugs known as statins to gauge what effect the source of funding had on the results. The research team noted that several factors could account for the tremendous slant in favor of sponsors’ products, including the fact that drug companies might squelch negative studies instead of publishing them and the possibility that trials might be deliberately designed in order to skew the results. For more, check out this San Francisco Chronicle story.

Cancer drug news – The year’s biggest cancer meeting, the annual gathering of the American Society for Clinical Oncology, took place in Chicago over the weekend. Here are a few highlights you might have missed:

• Meeting focus shifts from new drugs to new applications for old drugs (Business Week)
• New drugs show promise for liver cancer (WSJ)
• Biotech Telik reveals that its ovarian-cancer drug Telcyta not only didn’t work, it apparently killed women five months sooner than those receiving standard treatment; FDA orders halt to current Telcyta studies (Bloomberg, TheStreet.com)

California pension fund, private-equity money chase healthcare “cost-cutting” – Calpers, the largest pension fund in the U.S., invested $700 million in Health Evolution Partners, a private-equity fund run by a former Bush administration health official that aims to find ways to reduce the cost of healthcare. According to the NYT, the fund will focus on new ideas such as remote monitoring of elderly or demented patients in order to keep them out of nursing homes longer, telemedicine, chronic-disease management and genomics-based “personalized medicine” that tailors treatments to individual genetic profiles. One thing the fund will not be looking at, though, is electronic health records, which HEP founder David Brailer championed for two years in the Bush administration without much impact; he terms the field “a saturated market.” (See also this story in the SF Chronicle.)

I laid out some early thoughts on high-tech approaches to the healthcare crisis in this piece on Andy Grove’s reform crusade. In general, many of the things Brailer is interested in strike me much the same way Grove’s ideas did — that is, as worthy but woefully insufficient efforts if you expect them to actually reduce healthcare costs. Truly tackling the problem of costs means addressing structural failures of the system, including the current fee-for-service system that rewards doctors financially for doing more procedures or prescribing more drugs regardless of whether or not they help patients. In addition, it wouldn’t hurt to find out more about which medical treatments help patients most — which the NYT’s David Leonhardt addressed here and which I wrote about here — which probably also ultimately means restricting the use of the treatments deemed less effective.

Viewed against that backdrop, Health Evolution Partners and Calpers may be doing little more than spitting into the wind.

Speaking of healthcare reform – The WSJ weighed in with this piece on why the subject of healthcare reform doesn’t send politicians fleeing anymore. The usual suspects — rising health-insurance premiums and out-of-pocket costs, the growing numbers of uninsured Americans — make their obligatory appearance, but the really interesting nugget is how the insurance industry is angling to co-opt reform rather than opposing it outright as it did with the Clinton plan in 1993-94. That alone speaks volumes as to how thoroughly fed up many Americans have become with the ramshackle mess we call a healthcare system.

And while we’re on the subject – One of the major Bush administration healthcare-reform initiatives — besides the smashing success of electronic medical records, that is — was to push Medicare to institute financial incentives that would reward doctors for providing better care. Such “pay for performance,” however, seems to be falling short, according to a pilot study published in the Journal of the American Medical Association and described by the WSJ. In that study, 54 hospitals in the “pay for performance” plan did no better at improving medical practices than 446 hospitals that weren’t offered the incentives.

Gates to measure global public-health performance – No, not all by himself. The Bill and Melinda Gates Foundation, however, gave the University of Washington a $105 million grant to track the impact of public-health programs on a worldwide basis. From the WSJ article:

The new institute will be headed by Christopher Murray, a professor at the University of Washington, who previously served as director of a public-health program at Harvard University and as an official at the World Health Organization. The institute’s missions will include collecting and analyzing data on health trends, such as the prevalence of major diseases and the availability of health services, as well as conducting independent evaluations of the effectiveness of health programs.

The plan reflects the Gates foundation’s strategy of using statistical measures to determine the effectiveness of its grant-giving. The institute will disseminate the information it gathers about global health issues, programs and giving, officials said.

Institute officials pointed to the dearth of available statistics in global health, contrasting that to business, which runs on clear results. “It would seem strange that we would need an institute like this,” Dr. Murray said. But in public health, “we’re so far behind the norm in other sectors.”

The grant is the foundation’s second aimed at gathering better global public-health information.

More genetic links for breast cancer – Whole-genome association studies that tease out links between minute genetic variations and the likelihood of disease are definitely building momentum. Over the last several days, researchers reported six new variations that increase the risk of breast cancer for women who have inherited them. (For background, see this Boston Globe piece or my recent take on the subject.) It’s now conceivable that scientists may soon have an excellent handle on the genetic contributions to this particular disease.

As with any much-hyped medical discovery, however, the caveats here are almost as important as the headlines. These findings aren’t going to be translated into new diagnostic tests, much less treatments, any time soon. That’s largely because no one has yet figured out why these particular genetic changes should affect a woman’s cancer risk. And that, in part, stems from the fact that these variations aren’t mutations in identifiable genes, just alterations in stretches of DNA — regions sometimes unkindly called “junk DNA” — whose function is unknown.

In fact, these findings are purely statistical conclusions drawn from analyses of large groups of people and their genomes. While it seems unlikely that they’re simply spurious correlations — among other things, the number of research teams confirming each others’ findings argues against that — odder things have happened on the frontiers of science. Nick Wade of the NYT has more.

Dire straits for diabetes drug – A little more than a week ago, the New England Journal of Medicine published cardiologist Steve Nissen’s analysis suggesting that the heavily prescribed diabetes drug Avandia may boost the risk of heart attacks by roughy 40 percent. Nissen himself acknowledged that his paper — a “meta-analysis” that drew conclusions by pooling data from several dozen different clinical trials, a frequently used but often controversial technique — wasn’t conclusive, and a variety of his critics ranging from Avandia’s maker, GlaxoSmithKline, former FDA official Scott Gottlieb and the editors of the U.K. medical journal the Lancet (PDF) have argued that the medical community should wait for the results of a large clinical trial that won’t produce data for another year or two.

Since then, however, Republican Sen. Charles Grassley has accused the FDA of reaching the same conclusion internally but without taking any action; GSK warned that the large Avandia trial everyone is waiting for may be jeopardized because patients concerned about the drug’s safety are bailing out; and early indications suggest that ordinary patients may be doing likewise. It’s a huge disaster for what had been a $3 billion-a-year drug, and one that could have been mitigated if GSK and the FDA had been more open about potential safety problems early on. Because there’s no question that an important cost-benefit question — that is, whether diabetics benefit more from the blood-sugar control Avandia makes possible than they put at risk with the potential higher risk of heart attacks — has been lost in the furor.

Chinese drug official sentenced to death – Think FDA officials have it tough these days? Yesterday, the Chinese government sentenced its former top food and drug official, Zheng Xiaoyu, to death for taking $850,000 in drug-company bribes to overlook fake or defective medicines and food products.

Man Bites Dog Watch: Biotech CEO says drug prices are too high – Elan Pharmaceuticals CEO Kelly Martin appears to have broken one of the industry’s taboos by arguing that the common practice of charging all the market will bear for new biotech drugs — the very reasoning that has led to drugs for rare genetic diseases that cost $200,000 a year — is “unsustainable.” While there’s not enough detail in this interview snippet from the Financial Times (via Forbes) to know exactly what Martin means by this, it certainly sounds as if Elan might be edging toward some kind of slightly more rational pricing policy — or at least acknowledging that Medicare and private insurers aren’t likely to continue paying through the nose forever. Too bad some people seem to think that Elan might make a tasty takeover target for Big Pharma, whose own addiction to high prices hasn’t shown much evidence of waning.

Amgen’s woes continue to mount – From bad to worse to… even worse, I guess. Last week, experts at the European Union’s drug regulator recommended against approval of Amgen’s colon-cancer drug Vectibix, saying its benefits didn’t outweigh its disadvantages. Vectibix has hit a number of snags recently, including a halted clinical trial in which a combination of Vectibix and Genentech’s Avastin appeared to worsen patients’ odds of survival. The London-based European Medicines Agency was also concerned that evidence suggesting that Vectibix slows the progression of cancer was weak.

Separately, the EU gave preliminary approval to Roche’s Mircera, a potential competitor to Amgen’s best-selling anemia drugs Epogen and Aranesp. Mircera’s U.S. approval has been delayed and Amgen has sued Roche for patent infringement in any case, but seeing a competitor edge closer to the starting line can’t be good news for the beleaguered biotech. The LAT has more; so does Pharmalot.

Odds and ends from around the Web – A collection of quick takes on interesting items that might warrant a deeper look down the line:

• Ten years after Bill Clinton launched a drive to find an AIDS vaccine within a decade, the goal is nowhere in sight (Scientific American)
• Dendreon, still reeling from the FDA’s decision to postpone approval of its prostate-cancer vaccine, cuts staff by 18 percent (AP via Forbes)
• Medicare announced it won’t reimburse for artificial disks used as alternatives to spinal fusion, at least in patients 60 and older, dashing the hopes of medical-device makers (NYT)
• A California doctor’s group has begun posting its prices for straightforward procedures in an attempt to ward off competition from inexpensive walk-in medical clinics (LAT via the Merc)
• Medical researchers have teamed up with hedge-fund managers to offer a $1 million prize for the best new ideas in cancer research (Reuters)

No nukes in lymphoma treatment – Two innovative biotech drugs that target tumor cells for destruction by tiny radioactive particles are struggling in the marketplace, in part because cancer doctors are simply too specialized to make proper use of them. The drugs — Zevalin (pictured at left), from Biogen Idec, and Bexxar, now produced by GlaxoSmithKline — consist of bioengineered antibodies that carry fragments of radioactive material directly to lymphoma tumors in the bloodstream, where the localized radiation can kill cancer cells with fewer side effects than traditional radiation or chemotherapy.

Although both drugs seem to work well, fewer than 10 percent of eligible lymphoma patients receive either one, the AP reports. One main reason: Oncologists don’t usually work with radioactive materials, and so must send patients to nuclear-medicine specialists instead, something many are loathe to do. Demand for the drugs is so anemic that Biogen Idec announced in December that it will try to sell off Zevalin to another company. It’s an interesting tale of how some innovations can fall completely flat when they don’t neatly fit modern medicine’s specializations.

Vaccinating infants — or cows — for E. coli – Those are two possible steps that might protect people from food poisoning by the bacterium Escherichia coli, which was responsible for two major outbreaks last fall, one involving bagged spinach and the other contaminated lettuce served in chain tacos. At the moment, doctors have few options for treating E. coli-related illness, but have begun considering ways to vaccinate children against the bug and to test possible therapies. Canada last year approved an agricultural vaccine for cows that can limit, but not eliminate, E. coli in the animal’s manure. (Cows and their waste are the primary source of the microbe.) The NYT has the story.

New eggs from old ovaries – In a fascinating fertility-medicine development, women can now have small strips of their ovaries frozen, then thawed and re-implanted years later to produce youthful-seeming eggs — even if they have already reached menopause. The technique is most commonly used when medical treatments such as chemotherapy threaten a woman’s fertility, although some women simply hope to improve their odds of bearing children in later years. Check out the WSJ story here.

Ballooning costs of biotech drugs – In five years, biotechnology treatments could account for a full quarter of all prescription-drug spending, according to a study by pharmacy-benefits manager Express Scripts. Spending on biotech drugs is rising far more quickly than for traditional pharmaceuticals, largely because many biotech drugs tend to be vastly more expensive, imposing costs that can range into the tens of thousands — or even hundreds of thousands — of dollars per year. Overall spending on biotech drugs rose 21 percent in 2006, compared to a 5.9 percent increase for traditional pills. By 2010, the company predicts, biotech drug spending will rise to $99 billion and will account for 26 percent of all drug costs, almost double the $54 billion spent in 2006. New drugs for cancer, arthritis and other inflammatory conditions are expected to account for the bulk of that growth. (Hat tip: Reuters, via the San Diego Union-Tribune.)

Additional signs of life among early-stage biotechs – Solace Pharmaceuticals today said it raised $15 million in an early venture round, providing further evidence that investors’ interest in younger biotechs may be perking up. The Boston-based company is developing new pain treatments; its investors include Polaris Venture Partners and InterWest Partners.

Doctors and sales reps, entangled again – A federal court struck down a New Hampshire law that barred the sale of physicians’ prescribing patterns to drug companies, information that drug reps use to tailor their approach to particular doctors. According to the NYT account, the decision may impact several other states that have considered similar laws. Separately, the NYT reports that some doctors are starting to just say no to free drug samples.

Prospects for “biogeneric” legislation may be dimming – Several reports suggest that momentum behind the push to allow cheap generic-style competitors to expensive biotech drugs is slowing, largely because the Senate failed to include the bill in a package of proposed laws that include various FDA reforms and renewal of the program under which drug-industry fees help pay for drug approvals. The biogenerics bill may still move separately, but the conventional wisdom seems to be that its odds were much better as part of the FDA package. The NYT has more on that FDA-reform package here.

Now that AstraZeneca has made the bold — or impulsive — decision to snap up MedImmune for $15.6 billion in cash, one big question is whether the U.K. pharmaceutical giant has kicked Big Pharma’s appetite for biotech acquisitions into high gear.

The green-eyeshade types are generally still scratching their heads over the rich price, which amounted to a 21 percent premium over MedImmune’s close on Friday. The biotech was known primarily for Synagis, an antibody-based drug that prevents a common respiratory infection in babies, and FluMist, a so-far underperforming influenza vaccine that’s delivered via a nasal spray instead of injection. MedImmune has next-generation versions of both drugs in development, but neither seems likely to set the world on fire. The company also reportedly has more than 40 other experimental drugs in its pipeline, but of course it’s far from certain that any of them will ever even make it to market, much less become the blockbusters that AstraZeneca is presumably looking for.

In fact, odds are good that AstraZeneca fell victim to the “winner’s curse,” the well-known tendency of bidders to overpay, sometimes dramatically, in competitive auctions. The WSJ reports that at least four large companies, including Eli Lilly, had been involved in the MedImmune bidding — a classic blueprint for overheated competition. Somewhere, Carl Icahn is smiling.

So, of course, are other biotech investors, who have to be hoping that whatever fever AstraZeneca came down with continues to spread. The WSJ story notes that the deal is “sure to push up valuations for similarly sized companies,” and indeed the Amex biotechnology index bumped up almost two percent on the news. Other blogs are now rife with speculation over which companies might now be in play — the WSJ Health Blog thinks Biogen Idec, Medarex and some specialty pharma companies could be next, while over at Pharmalot, Ed Silverman tosses ImClone Systems, Xoma, PDL BioPharma and Telik into the mix.

Should the expected free-for-all materialize, it will obviously have major implications for venture investors, who are already plunging more deeply into the sector. At the same time, I’d also expect to see more blood on the floor on the pharma side, as it’s far from clear to me that buyers like AstraZeneca really understand what they’re getting into. I suspect that many biotech acquisitions by pharma don’t end well — the cultures are very different, and it’s very easy for even a substantial biotech like MedImmune to get lost inside the vast structure of a $26 billion behemoth like AstraZeneca.

That, at least, was generally the logic behind the rage for pharma-biotech partnerships, in which drug companies could trade cash for future rights to experimental drugs without all the messiness that acquisitions entail. But it seems the desperation of Big Pharma knows no bounds these days.

One additional point: Little noted in all the hoopla is the fact that the acquisition takes out the last North American maker of flu vaccines, following last year’s purchase of Chiron by Novartis and that of Canada’s ID Biomedical by GlaxoSmithKline the year before. So far, the concentration of vaccine production in the hands of European pharmas hasn’t seemed to concern U.S. regulators much. And it probably won’t, either — at least until the next avian-flu scare, that is.

(Note: This item has been copied over to the Life Sciences page from its original location on the VentureBeat main page. To view it in its original context, with comments, click here.)

Cautionary tales: An occasional look at events with potential long-term impact for biotechnology

Personalized medicine takes a hit — Scientists have spent more than a decade scouring the human genome to identify genetic alterations that might predict your risk of developing, say, heart trouble or cancer. Now, however, a new study (subscription required) Wednesday in the Journal of the American Medical Association suggests that many of these disease “biomarkers” identified so far may be little more than junk. (For a lay review of the report, click here.)

The main problem here is that “personalized medicine” — a future in which doctors anticipate medical problems and prescribe tailored treatments based on your individual genetic profile — was supposed to be one of the revolutionary consequences (not to mention big businesses) of decoding of the human genome project. If biomarkers, which are effectively the building blocks of personalized medicine, don’t actually tell us what we thought they did, that’s not particularly encouraging.

In the JAMA study, a research team led by Washington University’s Thomas Morgan re-tested 85 biomarkers that previous studies had identified as risk factors for heart attacks and other problems related to coronary artery disease. To do so, the team scanned the genes of 811 heart patients and 650 healthy people in order to confirm the purported links between disease and particular genetic variations. Of the 85 variations retested, however, the researchers found that only one — a mutation in the gene for a protein called beta-fibrinogen — appeared to qualify as a true risk factor.

The problem seems to be that many biomarkers are “discovered” in small studies, where it’s difficult to tell the difference between a real gene-to-disease association and an imposter that appears in the data by random chance. Heart-disease specialists now face the disheartening task of starting all over with larger, more rigorous and more expensive trials. Since scientists claim to have identified dozens of biomarkers for other conditions — cancer in particular — in more or less the same way, it’s entirely possible that the current edifice for personalized medicine may be much shakier than just about anyone had imagined.

The little drug that could, and did, too much — Hands down, the most successful biotechnology drug in the world is erythropoietin, or EPO, a genetically engineered version of a natural human protein that stimulates the production of red blood cells. EPO and its next-generation cousin racked up $6.6 billion in 2006 sales for Amgen, helping make it the world’s biggest biotechnology company. EPO is primarily used to treat anemia in patients with kidney failure or those undergoing chemotherapy, and has long been a major cost item for Medicare, which in the U.S. pays for most of its use in kidney disease.

All, however, is not well in EPOland. Since late last year, the EPO-related drugs have started to pile up safety concerns, with studies showing that they may increase the risk of heart attacks and strokes in kidney patients at high doses and cut short the lives of cancer patients (some of whom were receiving radiation therapy and others who weren’t). Amgen’s travails with the drug are ably recounted by Marilyn Chase in this recent WSJ article (subscription required).

Although the WSJ notes concerns related to Amgen’s support for higher EPO doses and its advertising strategy, it stops short of accusing the company of engaging in Big Pharma-style overpromotion of its drugs. For that, you have to turn to a recent editorial in Nature Biotechnology (hat tip: Derek Lowe), which, among other things, blasts the company for a “massive marketing blitz” aimed at getting oncologists to use more of its drugs despite increasing fears that EPO-related drugs might actually promote tumor growth. As the editorial notes:

Amgen does not come out of this well. Although seeking new indications for existing medicines is clearly a valid strategy, the company appears to have miscalculated the balance between expansion and the risks to its existing business—and potentially opened itself to charges that it has recklessly endangered patients’ lives.

This is not territory any biotech — nor any drug company, for that matter — wants to find itself in.

By way of contrast, commercial hopes were high last year when Pfizer launched Exubera, the first inhalable form of insulin for diabetics. Co-developed by biotech Nektar Therapeutics, Exubera was supposed to relieve diabetics of the inconvenience associated with injecting insulin multiple times a day. Pfizer predicted the drug would eventually pull in blockbuster annual sales of $2 billion.

That, of course, hasn’t happened. The Exubera inhaler, it turns out, is cumbersome to use, the drug costs more than regular insulin, and patients appear spooked by lingering concerns about its impact on lung function. Not to mention the fact that new insulin-injection systems now use smaller needles and are far less painful than they used to be. Pfizer last week re-launched Exubera with a new marketing campaign. The moral here: Sometimes fear itself isn’t the only thing to fear in drug development.

Non-profit drugs? — Makers of drugs for HIV/AIDS have reluctantly started to embrace the notion that they can’t sell drugs intended for use in the developing world at First World prices, sometimes with the assist of an activist government like that of Thailand. Now comes news that GlaxoSmithKline plans to launch a combination vaccine called Globorix for use only in Africa from which it “never expects to make money”. A detailed but somewhat wishy-washy analysis (from a Fleishman-Hillard “consultant,” to boot) follows at Ethical Corporation, a self-described independent publisher and conference organizer in the U.K. that focuses on “how companies relate to the world around them” (hat tip: Pharmalot).

This is a tough one to puzzle out at this point. GSK may just be doing the right thing, as it appears to insist, or it may be trying to buy goodwill with drug activists and international NGOs to gain leverage in some other controversial area, which seems more likely. Given increasing drug-pricing pressures on pharmas and biotechs alike, though, it’s certainly intriguing and a trend worth watching.