European Regulators Remove GSK's Avandia From Market: Biotech's Latest Mishaps

by: The Burrill Report

The European Medicines Agency is removing GlaxoSmithKline’s (NYSE:GSK) diabetes drug Avandia from the market because the drug may increase a patient’s risk of heart failure. The U.S. Food and Drug Administration, in a coordinated announcement with the European regulator, agreed that the drug carries risks, but has decided to allow Avandia to remain on the market as a drug of last resort for patients that they have notified of the risks of heart failure associated with the drug. Avandia, once the best selling diabetes drug and the second best-seller in GSK’s product line, has seen sales of the drug drop dramatically since the controversy over its safety erupted. In 2009 sales reached nearly $1.2 billion, down from $3.2 billion in 2006.

Sanofi-Aventis (NYSE:SNY) said that its experimental treatment for limb ischemia failed in a late-stage clinical trail. The primary endpoint was to demonstrate the superiority of drug known as NV1FGF compared to a placebo in the prevention of major amputation or death from any cause over 12 months, whichever came first, in critical limb ischemia patients who were not eligible for revascularization. The company said it is evaluating its options on the development of the drug.

Siemens (SI) plans to take a $1.85 billion charge after its diagnostics unit failed to reach its targets, Bloomberg reported. Siemens, Europe’s largest engineering company, said it will write down the goodwill in its fiscal fourth quarter that ends Sept. 30. The company did not alter its projections for the year. The company said long-term changes in the healthcare market made it necessary to reassess growth expectations. The failure comes after a string of acquisitions. The company said it met its goal in hitting costs targets with its integration of three companies, but it missed its growth targets.

Alnylam Pharmaceuticals (NASDAQ:ALNY) said that it will eliminate 25 to 30 percent of its workforce as part of a corporate restructuring. The decision follows Novartis’ (NYSE:NVS) announcement that it has selected its full and final list of 31 targets, for which the Swiss pharmaceutical has exclusive rights to discover, develop, and commercialize RNAi therapeutics using Alnylam intellectual property and technology. In return, for any RNAi therapeutic products Novartis develops against these targets, Alnylam is entitled to receive significant milestone payments upon achievement of certain specified development and annual net sales events. In addition, Novartis has notified Alnylam that it has declined its option to execute an Adoption License per the terms of the original 2005 agreement.

Abbott Laboratories (NYSE:ABT) expects to eliminate 3,000 jobs, or about 3 percent of its workforce, following completion of its $6.2 billion acquisition of the pharmaceutical business of Solvay in February, Reuters reported. Most of the job cuts will come from former Solvay employees and cut across a wide range of job functions. Abbott, which has about 93,000 employees, plans to close the former U.S. headquarters of Solvay's pharmaceuticals unit in Marietta, Georgia by the end of 2011.

Abbott said it is initiating a voluntary recall of certain Similac-brand, powder infant formulas in the United States, Puerto Rico, Guam and some countries in the Caribbean. Abbott said it is recalling these products following an internal quality review, which detected the “remote possibility” of the presence of a small common beetle in the product produced in one production area in a single manufacturing facility. The United States Food and Drug Administration has determined that while the formula containing these beetles poses no immediate health risk, there is a possibility that infants who consume formula containing the beetles or their larvae, could experience symptoms of gastrointestinal discomfort and refusal to eat as a result of small insect parts irritating the GI tract. If these symptoms persist for more than a few days, a physician should be consulted.