Is old school, family-owned Roche trying to upstage its younger, sexier biotech partner? A recent partnership of near-blockbuster proportions may seem to say yes.

At a time when some investors have questioned whether Genentech, in which Roche owns a majority stake, has a robust enough offering in early-stage R&D, Roche is bolstering its oncology pipeline. The drug giant has partnered with Berkeley, CA-based Plexxikon to develop a targeted cancer therapy in a hefty deal that could be worth more than $700 million. (Genentech, although a significant source of Roche's oncology revenue here and abroad, is not involved in the deal.)

While Roche and Genentech have a number of programs in the works to expand indications for drugs like Avastin (bevacizumab) and Rituxan (rituximab), both companies are seeking to add more novel molecules to their pipelines.

The recent Roche deal involves Plexxikon's lead compound, PLX4032, which targets the BRAFV600 gene mutation. The mutation is seen in about 70 percent of melanoma patients and 60 percent of colorectal cancer patients. It is also seen in a large number of thyroid cancer patients.

"These patients seem not to respond as well as others do," said Plexxikon CEO K. Peter Hirth. "The consistent theme is that whenever you have that mutation, the outcome is very poor."

In total, about 100,000 cancer patients are estimated to have the mutation. The size of the Roche-Plexxikon deal could be an indication of the PLX4032 market potential.

Roche became interested in the compound because it selectively inhibits a single kinase, and targets a protein found only in diseased tissue. It also offers a favorable side-effect profile.

"The partnership will bring Roche into melanoma," said Roche's global head of pharma partnering, Peter Hug, "a move consistent with our continued efforts to address areas where there is a high unmet medical need and where we can make a positive difference in patients' lives."

For Plexxikon--a five-year-old company also developing compounds for metabolic, central nervous system, and inflammatory disorders--the deal provides access to Roche's international marketing muscle. The partnership also allows the smaller company to build its own sales force in the United States.

"We determined that Roche thinks very much along the same lines in terms of approaching development," said president Kathleen Glaub. "We'll have a seat at the development table--and that was very important to us."

Plexxikon submitted an IND for PLX4032 earlier this month, and Phase I clinical trials are expected to start by the end of the year. Later-stage trials could begin in the third quarter of 2007, according to Plexxikon's Hirth.

PLX4032 is the lead compound in the deal, but Roche will also have licensing rights to other inhibitors of the BRAF kinase being developed at Plexxikon.

Plexxikon also is collaborating with Roche Molecular Diagnostics on an in-vitro assay to screen for the presence of the BRAFV600 gene, and to identify potential responders.

The deal includes a $40 million upfront payment from Roche, $6 million in guaranteed research funding, up to $660 million upon completion of certain development milestones, and royalty payments.

Articles

Drug giant beefs up early-stage R&D, moving into Genentech's turf.

Roche One-Ups Partner

The multi-billion-dollar SSRI market has for years been a source of joy for drug makers working in the space. But these popular antidepressants may not be as effective as once thought, leaving SSRI patients wondering if they're on the right meds--and pharma companies clambering for a stake in a different reuptake-inhibitor market.

The potential blow came last week in the form of a 

Journal of the American Medical Association

 study, which suggests that about half of patients currently treated with selective serotonin reuptake inhibitors (SSRIs) would be better off on another antidepressant.

"SSRIs are the most widely used first-line drugs," said study author Bernard Carroll, scientific director at the Pacific Behavioral Research Foundation. "The trade-off is that while they're somewhat effective, they're not barn burners."

 study, which followed 241 Korean patients over five years, found a link between gene polymorphisms and a patient's response to different classes of drugs for late-life depression.

If clinicians treated patients based on these polymorphisms, the most commonly used drugs would be norepinephrine reuptake inhibitors (NRIs) rather than the more popular SSRIs. Of the 189,500 antidepressant prescriptions dispensed last year, more than 100,000 were for SSRIs, according to information from Verispan and IMS. The total category of antidepressants, of which SSRIs make up more than half, is valued at $12.5 billion.

NRIs, which were first introduced in the 1950s, fell out of favor as a primary treatment because of undesirable side effects. Carroll points out, though, that if clinicians evaluated patients for the presence of gene polymorphisms, the benefit of using an NRI could outweigh the side effects--thereby reducing SSRI use by as much as 50 percent. The 

 paper could also lead to research on new targets for drugs that work like NRIs, but have a more acceptable side-effect profile, Carroll noted.

 study, about 56 percent of Koreans and 45 percent of Caucasians had the GG genotype, which was associated with higher response rates to an NRI (83 percent) rather than an SSRI (59 percent).

Although prescriptions for SSRIs have been falling fast--four percent between 2004 and 2005--because of concerns about suicide risks, they remain one of the top-five most commonly prescribed drugs, according to Verispan. Last year's top-selling antidepressant, Pfizer's Zoloft (sertaline), which went off patent in June, is an SSRI. So is the third-most successful antidepressant, Forest Labs' Lexapro (escitalopram), which brought in $1.87 billion in the last fiscal year.

But companies that make SSRIs shouldn't panic yet.

"We all sort of knew [that genes play a role in treatment outcomes], but we didn't know what to do about it," Andrew Farah, chief of psychiatry and medical director at High Point Regional Health Systems in North Carolina, said about the findings. With no way to test patients for these polymorphisms in a clinical setting, "we've had only crude ways of pointing us in the right direction," he said.

"This study confirms what we know," Farah said, "but it's still too research-based at this point."

JAMA study questions effectiveness of popular antidepressants.

Downer for SSRI Makers

Five years after Gilead Sciences seemed to say "good riddance" to therapeutic areas outside its core competency of infectious disease, the company is taking another stab at a new market--raising questions about the best way to group a mid-size company.

With its acquisition of Myogen, Gilead, which is best known for its HIV franchise, will add products for pulmonary hypertension and heart failure to its portfolio. The move is a retreat from a strategy it pursued in 2001, when it sold its oncology assets to OSI in order to focus on infectious disease.

"One of the challenges of focus is that, at some point, you need to broaden horizons again," Howie Rosen, Gilead's vice president of commercial strategy, told 

. "When you get there, how do you maintain discipline, and at the same time get comfortable out of the existing zone of expertise?"

Although the acquisition--in which the Westminster, CO-based Myogen will receive $52.50 per share, or about $2.5 billion--diversifies Gilead's portfolio, the company will maintain its focus on specialty pharmaceuticals.

Myogen's product line, including hypertension drugs Flolan (epoprostenol) and Phase III candidate ambrisentan, complement the respiratory and pulmonary products Gilead absorbed through its August acquisition of Corus.

"They said for a long time that they wanted to expand into new verticals," said Sharon Seiler, a biotechnology analyst who covers Gilead at investment bank Punk Ziegel & Company, adding that the company "saturated the chronic antiviral" space.

Seiler questioned whether the pulmonary market is the best place for Gilead to expand, but noted that, like antivirals, the already-sizeable pulmonary market is growing as physicians make more frequent and earlier diagnoses.

Myogen wasn't actively looking for a buyer but was intrigued by Gilead's offer, according to Derek Cole, Myogen's director of investor relations.

He acknowledged that the compounds themselves "are not a direct overlap," but said Myogen saw advantage in Gilead's bigger resources, access to niche markets, and "substantial experience growing out franchises."

The challenge for growing companies is to expand product offerings in areas where they have scientific and commercial competencies--not just pursue growth for growth's sake, noted Jerry Cacciotti, managing director of life sciences at consulting firm Strategic Decisions Group.

He pointed to companies like Merck and Pfizer that changed course to focus on a core group of therapeutic areas, however broadly defined.

"That's been the success template for the small and mid-sized companies," Cacciotti said. "The single bullet sale is no longer possible. I think you're going to [see companies with] a richer commitment to a therapeutic space."

With a greater ratio of older to new drugs on the market, companies are finding that developing core areas of expertise brings certain advantages, such as consistent relationships with regulators and the ability to develop combination products.

At the same time, growing a company also means diversifying its competencies. "You can't have that growth strategy and stay focused on one therapeutic category," Cacciotti said.

After axing oncology, Gilead says it's ready for new therapeutic areas.

Pharmaceutical Executive-10-11-2006

Roche One-Ups Partner

Downer for SSRI Makers

Gilead Embraces Change