Pharmaconduct.org has another look at Pfizer's (PFE) announcement Monday, and tries to address some of the many unanswered questions left open by the company's press release. One thing that struck me (and many others) is that the company talked about "moving a number of functions" from sites like St. Louis and Collegeville, but did not come right out and say that they were closing. I understand that there's more than R&D that goes on in these places, but it still seems as if these moves will leave a lot of empty hallways, which you wouldn't think is the optimum solution.

A topic of local discussion has been the two Cambridge sites the new company has, and you can argue that one either way, too. "They do different things, and both of them should stay" goes up against "Why would you have two research sites in the same town if you didn't need to?" Monday's release was silent on this question, too.

The company has issued a press release detailing which sites are staying, and which are leaving:

Pfizer (PFE) will have five main research sites that will serve as central hubs for research activities in BioTherapeutics, PharmaTherapeutics and Vaccines. These sites are: Cambridge, Mass.; Groton, Conn.; Pearl River, N.Y.; La Jolla, Calif.; and Sandwich, U.K. These research-oriented laboratories will be supplemented by specialized research capabilities, such as monoclonal antibody discovery in San Francisco, regenerative medicine work in Cambridge, U.K., and research and development activities in Shanghai, China..

There's a long, detailed article up over at Bloomberg on the recent run of huge fines for off-label promotion of drugs. Pfizer (PFE), Lilly (LLY), Bristol-Meyers Squibb (BMY), and Schering-Plough (SGP) all get mentioned in great detail.

And there's a key point from the whole depressing thing: the reason that marketing departments do this kind of thing is that it makes money. Even after you pay a billion dollars in fines, you can still come out ahead, and you might not even have to pay the fines. It's just being put down as a cost of doing business - it's a speeding ticket, and it's being weighed against the cost of driving under the legal limit.

Johnson & Johnson's (JNJ) CEO has given an interview to the Financial Times explaining his company's strategy with acquisitions. And right now, that strategy is...not to make acquisitions. They see partnerships as making a lot more sense:

“The cost of developing compounds has become so high and become so risky that we are looking to share the risks and opportunities and find more and more partnerships.”

Xconomy has a useful two-part interview with Christopher Henney, who helped to found Icos (ICOS), Dendreon (DNDN), and Immunex. The part I found most interesting, naturally, was the section entitled "Five Red Flags of Biotech". (Note to the Xconony folks - the article actually has six of them). Here are his warning signs if you're thinking of investing in (or, I should add, working for!) a new company and you're checking them out. Beware of. . .

1. Top management without a scientific background. If the CEO isn't a scientist, Henney says, there had better be some good ones very close to him, and he's not talking about the scientific advisory board, either.

I wanted to highlight a comment that showed up recently in the latest Pfizer (PFE) post:

I would just like to point out that there is often mention of Pfizer as being a poorly productive R&D outfit on this blog, but there is rarely any mention of the scientists themselves. Having worked as a chemist at both Merck (MRK) and also at Pfizer, I would just like to point out that in my experience, the chemists at both are highly productive, extremely hardworking, and passionate individuals. It's a shame that the discussions here do not distinguish between those carrying out the research and the direction of the company overall.

The Wall Street Journal's Health Blog got a chance to ask the higher-ups at Pfizer (PFE) what their R&D will look like a year from now. Their (understandably) not too-in-depth answers are here: Decentralized research units, with some functions run company-wide, and this quote: "There are elements of drug discovery and development where you just need scale".

Well played! I wouldn't expect anything less. But are there elements of drug discovery and development where scale - massive, ponderous, hundreds-of-vice-presidents scale - actually hurts? I don't think you're going to hear that topic brought up very much at Pfizer, at least not out in the open. And let's not lump those two functions together: drug development benefits from a company's size a lot more than drug discovery does. Once you've gotten to a critical-mass level, sheer size (as far as I can see) does nothing to help productivity in drug discovery, and actually seems to damage it. As evidence for that statement, let me point to Pfizer's internal research record, as opposed to the stuff they've gone out and bought.

I have no solid information on this question myself, but Eric Milgram over at Pharmaconduct is trying a wisdom-of-crowds approach. He's got a survey up of which sites people think will close, and it'll be interesting to see how well this matches up with the eventual reality.

At the bottom of the list, naturally, is Pfizer's (PFE) site at Groton. I think we can safely predict that this one will stay open, but the New London site, right across the river, doesn't fare so well in the voting. In fact, it's the second-highest-ranking Pfizer site on the list, outdone only by St. Louis (the former Monsanto). The rest of the top contenders are all Wyeth, led by Madison and Princeton.

One of this blog's regular correspondents has just been attending a chemistry outsourcing conference (program here), and heard a very interesting talk from Stefan Loren of a Baltimore investment advisory firm, Westwicke Partners. Loren's a product of the Sharpless lab, who went on to Abbott (ABT), then Wall Street (Legg Mason (LM) and into the hedge fund business), and had some very provocative things to say about our industry:

His talk, "The Pharma Titanic: It's Time to Root for the Iceberg" presented a sobering view of the challenges that big pharma will have to deal with if it wants to survive.

The latest re-org announcement is from Eli Lilly (LLY). The company is getting braced for the Zyprexa patent expiration (and the possibility that Prasugrel and others won't be able to make up for as much lost revenue as they thought). Their target is a 14% head count reduction by the end of 2011.

For everyone's sake there, if they're really going to do that, I hope they do it quickly. Having that sort of thing hanging around over everyone's head is, to put it mildly, not good for anyone's quality of life (whether they're being let go or not). I haven't heard how these cuts will be distributed (across research, sales, administrative, etc.), but I suspect that details will start leaking out soon.

Here's more detail on the case that led to Pfizer's (PFE) 2.3 billion dollar fine/settlement, courtesy of Bloomberg. Here's how things got started, apparently:

Pfizer Inc. sales folks had one tough customer in psychiatrist Stefan Kruszewski. He didn’t buy their pitch to prescribe the anti-psychotic drug Geodon to children, a use that hadn’t been approved by federal regulators.

Well, I didn't see this one coming. Dainippon Sumitomo has announced that it's buying Sepracor (SEPR). My first thought on reading this was "Are they sure they want to do that?"

I say that because the ostensible reason that the Japanese company is pulling out their wallet is that they're looking to replace declining revenues at home. In that case, why are they buying declining revenues over here? Their flagship product (Lunesta) is going off patent in the not-too-distant future, and they don't have a gigantic pipeline of stuff behind it.

No sooner do I write another post about pharma marketing than Pfizer (PFE) finds itself paying 3.2 billion dollars in fines for doing it improperly. 1.2 billion of that is a criminal penalty, and needless to say, they've set the current record.

The issues were off-label promotion of Bexxtra, Geodon, Zyvox, and Lyrica, with the largest penalties coming from the first two. Pfizer's had three other settlements of this kind in the last few years, and that record was definitely a factor this time, as the Justice Department looked for a figure that might get the company's attention. Also supposed to get the company's attention is a five-year "integrity agreement" with the Department of Health and Human Services, but it's worth noting that the company was already supposedly operating under an earlier such agreement when it was promoting Bexxtra. I think the money has a better chance of being noticed, myself.

Forest Labs (FRX) has done very, very well with Lexapro (escitalopram) over the years. They're a comparatively small company, and their collaboration with Lundbeck (HLUKY.PK) (also a comparatively small company) in the antidepressant field has been the biggest event in their history.

Lexapro is the pure enantiomer of the earlier Lundbeck drug Celexa (citalopram), and it's been a very successful follow-on. (For a nasty spat over generic production of citalopram, see here). I'm generally not too keen on the follow-up-with-the-single-enantiomer strategy, I have to say. In general, I think it's slowly disappearing from the world as regulatory agencies look down on racemic mixtures. (I've never worked on a program myself where we seriously considered taking a racemate to the clinic - we always assumed that we'd end up developing a single enantiomer).

Ariad's (ARIA) trek through the legal system has not yet ended! This story has been running for years now - I think the original lawsuit was filed in 2002. Back in the spring, a decision by the Court of Appeals for the Federal Circuit reversed a Massachusetts District Court ruling in Ariad v. Eli Lilly (LLY). That decision invalidated a lot of Ariad's key patent claims regarding the Nf-kB signaling pathway, and some of us thought (well, I did) that this would be the end of the story.

But no, Ariad filed a petition in June (PDF file) for a rehearing, and that has now been granted. So this fall, the decision will be revisited. It looks like this time, though, the question will not be decided so much on the science and history of Nf-kB, but on a question of patentability.

Eli Lilly (LLY) announced some bad news last week when they dropped arzoxifene, a once-promising osteoporosis treatment (and successor to Evista (raloxifene), which has been one of the company's big successes).

If this drug had been found ten or fifteen years ago, it might have made it through. But the trial data showed that while it made its primary endpoints (reducing vertebral fractures, for example), it missed several secondary ones (such as, well, non-vertebral fractures). And the side effect profile wasn't good, either. That combination meant that the drug was going to face a hard time at the FDA for starters, and even if it somehow got through, it would face a hard time competing with generic Fosamax (and Lilly's own Evista).

Novartis (NVS) has had trouble for years with animal rights activists, and now things are getting nastier than ever:

Novartis CEO Daniel Vasella says the people who burned down his holiday home and defiled his family's graves are not criminals but "terrorists" beyond dialogue.

As much as I defend the industry I work in, I have to talk about things that we do that I don't think are so defensible. Another one of those has come up thanks to the New York Times and PLoS Medicine, who obtained a pile of records from a current court case.

This article has the details. Wyeth (WYE) seems to have contracted with a medical writing outfit (DesignWrite) to produce and place a number of review articles covering hormone therapy for menopausal women. (Wyeth, of course, was the main player in that market.) The articles seem to have been entirely written by the staff at DesignWrite - authors are listed as "TBD", and then academics were recruited to serve as lead authors and to submit the papers to journals.

I know that many people are getting tired of this topic. But many people who work in the industry have never met someone who's convinced that drug companies are just standing in the way of innovation, and that all the good stuff comes from the NIH, anyway. So allow me a couple of quick quotes from Dr. Jerry Avorn, chief of pharmacoepidemiology at Boston's Brigham and Women's Hospital, and (thus) a person who should know better:

". . .Virtually every progressive recommendation about health policy for the last 20 or 30 years that the drug industry felt might harm its bottom line has been met by the threat that if they don't make as much money before, innovation will cease and there will be no cures for new diseases. It came up around Medicare drug pricing and generic drugs. It's not a surprise to see it come up around health-care reform.

Well, here's a nasty surprise for you: your new drug gets a 14 to 1 "Yes" vote from an FDA advisory committee, but the agency turns you down, anyway. That's what's just happened to Savient (SVNT) and their new biologic product for gout, Krystexxa (pegloticase).

The FDA isn't required to say why they do such things, at least not to anyone else other than the company that submitted the drug. And they're aren't talking this time, either, but it looks like there's a manufacturing issue involved. The process for making Krystexxa seems to have changed a bit since the clinical trial batches, and the agency apparently wants to make sure that this hasn't altered anything. If all goes well, then, you'd expect the company to get things straightened out sometime next year, but for Savient, that's an awful long time to wait.