Needle Work

They were costly failures but important salvos in a new war on drugs. In November the Food & Drug Administration nixed an attempt by Novartis and Momenta, a small biotech outfit, to launch a copycat of Sanofi-Aventis' $4 billion clot-buster Lovenox. Reason: The knockoff artists hadn't proved safety and efficacy for their medicine. That same month Roche got FDA approval for a drug similar to Amgen's Epogen, an anemia drug, but was blocked by a judge who ruled Roche was infringing on Amgen's patent.

Generic drug makers have been pushing at the gates of a $30-billion-a-year market for protein drugs. But now big pharma is getting into the act, trying to produce generic versions, the very medicines (to treat multiple sclerosis, diabetes, anemia, deficiencies in growth hormone and the like) that started the biotech revolution 30 years ago and gave rise to Genentech (nyse: DNA - news - people ), Amgen (nasdaq: AMGN - news - people ) and Biogen Idec (nasdaq: BIIB - news - people ). There's too much at stake to let small setbacks get in the way. The giants are starved for new blockbusters--last year had the fewest new drug approvals in two decades--and one-third or so of new products in development are protein drugs. "If the marketplace is open," says Ken C. Cacciatore, a managing director at Cowen & Co., "they will participate." Large pharmaceuticals, he says, "have the capabilities at their disposal now." On another front, as part of their approaches to controlling health care costs, presidential hopefuls John McCain and Hillary Clinton have plans to make biogenerics a reality. Congress has five different bills, too.

But will the follow-ons be cheaper than the originals? To some degree that depends on Capitol Hill and whether a resulting law requires limited or extensive clinical trials. What can't be legislated away is the high cost of producing biologics.

Protein drugs require living cells and a delicate and very expensive manufacturing process that pushes the cost of developing a new drug, even a look-alike, to $200 million to $300 million, according to Cowen. That's less than the average $900 million you need to launch an original drug. But it's way more than what it costs to copy a simple molecule like the one in Zocor or Zantac.

Simple pills get an FDA pass based on clinical trials involving only blood tests to ensure the active drug is present at the right levels. A new knockoff of an existing heartburn treatment might cost $2 million. Competition among other generics will drive down consumer prices, creating a 30% drop when the first rivals step in and an 80% discount once 20 or more competitors pile on, according to researchers at Duke University. That's why small-molecule generics are so much cheaper in America than they are in Canada and western Europe.

It's a different story with biogenerics. Steep costs, as well as high barriers to entering this business, will restrict competition to a small contest among the titans of the industry. Some version of clinical trials, not just blood work, will be required to prove safety and efficacy. Most generics companies simply can't afford the hassle. All this is likely to keep prices high.

Already companies like Pfizer (nyse: PFE - news - people ), Merck (nyse: MRK - news - people ) and Bristol-Myers Squibb (nyse: BMY - news - people ) are quietly drawing new battle lines. They are spending hundreds of millions of dollars to build manufacturing plants--giant bio-vats that hold millions of gallons of cultured mammal cells--in order to develop new protein drugs to treat cancer, rheumatoid arthritis and Alzheimer's. Biogenerics will be reliable moneymakers, too. Big pharma needs as many cash machines as it can get.

Merck has a killer app when it comes to making copycat proteins. In 2006 it dropped $400 million on privately held GlycoFi to get its hands on a technology that can produce biotech drugs cheaply in yeast, instead of in complex and finicky mammalian cells. Merck wanted the tools for its own drug development. But one of GlycoFi's proofs of concept was a scientific paper showing its method could be used to create a copy of Amgen's Epogen.

By the Numbers

Drug Money

Genzyme's Cerezyme, which treats Gaucher disease, is a blockbuster, treating few patients at a very high price.

$1.1 billion Cerezyme's sales last year.

5,000 The number of people who have received Cerezyme prescriptions.

30% Expected discount from the first copycat drug when Cerezyme goes off patent.

Barr Gets FDA OK for Generic Mirapex

MONTVALE, N.J. -

Generic drug maker Barr Pharmaceuticals Inc. said Tuesday federal regulators granted final marketing approval to its generic version of Boehringer Ingelheim Pharmaceuticals Inc.'s drug Mirapex for Parkinson's disease.

The Food and Drug Administration approved Barr's abbreviated new drug application for pramipexole dihydrochloride (Mirapex) at 0.125, 0.25, 0.5, 1 and 1.5 milligram dosages.

The company believes it is the first to file an abbreviated new drug application with a paragraph IV certification for Mirapex at those dosages. A Paragraph IV certification indicates that a generic drug would infringe an existing patent, but the company claims that the patent is not valid.

The drug is indicated for signs and symptoms of idiopathic Parkinson's disease, which is a degenerative disorder of the central nervous system.

Barr is challenging a patent protecting Mirapex, and a trial is scheduled to begin on March 10, in the District Court in Delaware.

Under terms of a court order, Barr has not yet launched the pramipexole dihydrochloride.

Shares of Barr rose 49 cents to $50.45 in afternoon trading.

Getting 'Off Meds' Has Consequences

CHICAGO -

Psychiatrists say it's a common scenario - troubled patients stop taking their medicine, because of cost, side effects, the stigma, or delusions that they don't need it. The consequences can be tragic, though rarely as horrific as the Valentine's Day suicide-slaughter at Northern Illinois University.

No one knows what triggered Steven Kazmierczak's campus rampage, yet one of the clues to an emerging psychiatric profile is this: His girlfriend says he recently stopped taking Prozac.

Prozac is a drug generally prescribed for major depression. It and similar antidepressants carry warning labels about risks for suicidal behavior in patients younger than Kazmierczak, who was 27.

Still, stopping these drugs can also lead to suicidal thoughts and behavior. And taking them may increase the risk for other violence if they're mistakenly prescribed as the only treatment for patients in a depressive phase of bipolar disorder, psychiatrists say. In that case, the drugs may trigger a manic phase that could include aggressive behavior toward others.

In court cases, attorneys have sometimes tried to blame violent behavior on Prozac. However, scientific evidence to support that is lacking, and psychiatrists and the drug's maker, Eli Lilly and Co. (nyse: LLY - news - people ), say the underlying mental illness is the most likely culprit.

"There is much information that is still unknown about his life and medical history and therefore it may never be known as to why (Kazmierczak) ultimately chose to take the lives of others as well as himself," Lilly spokesman Charlie McAtee said in a statement.

Kazmierczak, a graduate student in social work at the University of Illinois, was a worrier with obsessive-compulsive tendencies, his girlfriend told CNN, but it is not known if he'd been diagnosed with depression or bipolar disorder. She said he'd stopped taking Prozac three weeks before last week's tragedy.

Two days before the Feb. 14 shootings, a New York man who'd been treated for psychiatric problems and who had also stopped taking medication is accused of fatally stabbing a therapist.

"Can stopping medications be an important contributory factor to deterioration of behavior ... where violence ends up being committed? Yes, absolutely," said Dr. Paul Ragan, an associate professor of psychiatry at Vanderbilt University.

Ragan said he has had patients attempt suicide after stopping antidepressants because their insurance ran out, although violence against others is rare in depression.

"Suspending a patient's use of antidepressants is very rarely linked to violence toward others," McAtee said.

On or off medication, the vast majority of people with schizophrenia, depression and bipolar disorder "do not engage in violent behavior," said Dr. David Fassler, a University of Vermont psychiatry professor.

Still, compliance with medication is a significant problem, he said.

"Research demonstrates that about 25 percent of patients stop taking antidepressant medication within three months. By six months, some studies suggest that the overall compliance rate is less than 50 percent," Fassler said.

For about one-third of patients, side effects are the main reason they stop taking psychiatric drugs, Fassler said.

Dr. Lynne Tan, a psychiatrist at Montefiore Medical Center in New York, said many patients complain that antidepressants cause restlessness, agitation and racing thoughts. Sweating, sexual dysfunction and headaches are other common side effects. Sometimes they subside over time, and if not, patients can be switched to other medications, she said.

Elizabeth, a 26-year-old graduate student in social work at the University of Chicago who asked that her last name not be used to protect her privacy, said she stopped and restarted antidepressants many times since being diagnosed with depression at age 16.

"Stigma does play a big part of it," she said. "That's why I was so eager to consider myself well and to go off of it."

When she left college and was no longer covered by her parents' insurance, cost also became an issue - $60 to $70 a month for a generic antidepressant. She declined to identify the drug.

But each time she stopped, debilitating depression including suicidal thoughts would return, she said.

"If I've learned anything from this journey, it's that medication really works for me," she said.

Greg Coughlin, 53, a health department employee for DuPage County west of Chicago, said several years ago he repeatedly stopped taking drugs for a type of schizophrenia because he was "in denial" about suffering from mental illness.

Coughlin said the last time he stopped, in the 1990s, he became extremely obnoxious and agitated, and ended up in a mental hospital.

Now he's on three mood stabilizers that zap his energy and cause weight gain, but make him feel "more solid, more relaxed, more satisfied in life."

Coughlin, a board member of the Illinois chapter of the National Alliance on Mental Illness, said he finally accepts that to function, he'll need to be on drugs for life.

Elizabeth said she can live with the side effects - extreme sweating and a hand tremor - and credits psychotherapy, a support group and exercise with helping her cope.

While accounts from friends and professors suggest that at least on the surface, Kazmierczak was coping well, there were also signs of trouble.

He had a history of cutting himself, which is often a symptom of inner anger and a sense of feeling powerless, said psychologist Wendy Lader, who runs a suburban Chicago treatment center for self-cutters.

Self-cutting is thought to be more common among women, but women are also more likely than men to seek treatment for it, Lader said.

Kazmierczak also wore macabre shock-value tattoos covering both forearms - an unusual and disturbing choice for someone pursuing a career in social work, Lader said.

Dr. Louis Kraus, a forensic psychologist with Rush University Medical Center in Chicago, said with no known criminal background or history of violence or anti-social behavior before the killings, Kazmierczak presents a bewildering psychiatric image.

"Obviously something very tragic is missing from this puzzle that we don't fully understand yet," Kraus said.

Pfizer to Buy Encysive for About $195M

NEW YORK -

Drug maker Pfizer Inc. says it will buy biopharmaceutical company Encysive Pharmaceuticals Inc. for about $195 million to strengthen its portfolio in products treating high blood pressure.

Pfizer (nyse: PFE - news - people ) will make a $2.35-per-share cash tender offer for Encysive.

The acquisition would give Pfizer the rights to Thelin, an oral drug approved in several European Union countries that treats pulmonary arterial hypertension, which refers to high blood pressure in the pulmonary artery.

Pfizer says it plans a late-stage trial of Thelin in the United States to obtain approval for the drug by the Food and Drug Administration.

Encysive's board of directors unanimously has approved the agreement and recommended its stockholders accept the offer and tender their shares.

The deal is expected to close in the second quarter

Market Spotlight: Generic Drugs

NEW YORK -

Emboldened by favorable court rulings and the need to gain an early foothold in the market, generic drug developers are increasingly challenging lucrative drug patents.

In many cases those challenges have been coming in the form of at-risk launches, where a generic version of a patented drug is sold before the patent expires.

Heavyweights including Teva Pharmaceutical Industries Ltd. (nasdaq: TEVA - news - people ), Barr Pharmaceuticals (nyse: BRL - news - people ) Inc. and Mylan Pharmaceuticals Inc. have been growing bolder when it comes to this strategy, as the risk-reward equation seems to have shifted to their favor.

"I think they've just gotten a lot smarter as an industry," said WR Hambrecht analyst Andrew S. Forman. "Generics have the sympathy, pricing advantage and generally have facts on their side; there's been settlements, but no losses."

Often, he said, pharmaceutical companies will try to gain patent extensions to stave off generic competition. With more insurers and Medicare pushing members to generic options because of the price difference, the market seems to have swayed. Generic drug developers now claim more than two-thirds of all prescriptions, up from less than half 10 years ago.

The most recent salvo came from Teva, the largest generic drug developer in the world. The Israel-based company had challenged Wyeth's patent on the blockbuster heartburn drug Protonix. That patent isn't due to expire for three more years, but in December, Teva launched its generic version over the course of several days, before ceasing shipments as part of a deal.

Protonix sales reached $1.9 billion in 2007. Drugstore.com currently lists generic Protonix at a 7.7 percent discount to the branded version. A similar discount currently exists for Lotrel, a blood pressure drug made by Novartis (nyse: NVS - news - people ), for which Teva enjoys market exclusivity with a generic.

Other disputes involve Forest Laboratories Inc. (nyse: FRX - news - people ) and generic drug developers Teva and Barr over the Alzheimer's disease treatment Namenda. Endo Pharmaceuticals Holdings Inc. (nasdaq: ENDP - news - people ) and Penwest Pharmaceuticals Co. (nasdaq: PPCO - news - people ) are suing Impax Laboratories over plans to make a version of the pain reliever Opana ER.

Several pharmaceuticals companies, including Forest and Wyeth, declined comment on the ongoing patent challenges.

"There are just more Paragraph IV (patent dispute) challengers than years ago," said Mike Dzwonczyk, a patent attorney at Sughrue Mion PLLC. "The likelihood of sharing market space is much higher now than it ever used to be."

While generic companies run the risk of paying triple-damages if they conduct an at-risk launch and then lose the patent dispute, several recent court cases have gone in favor of generics, he said. It has become harder for pharma to prove a company willfully infringed a patent, for example, lessening the risk of triple damages.

Also, the downside risk to losing a case has become smaller for large companies like Teva, which can often offset any future losses with big sales gains early on.

Roche to Force Through Ventana Merger

BASEL, Switzerland -

Pharmaceuticals maker Roche Holding AG said Tuesday it is poised to complete its acquisition of Ventana Medical Systems Inc.

Basel-based Roche (other-otc: RHHBY.PK - news - people ) said it has acquired 93.7 percent of Ventana shares and expects to force through a merger with the U.S.-based maker of drug testing equipment without the approval of the remaining shareholders.

Roche won approval for the deal from Ventana's board in January after raising its offer per share by about 19 percent to US$89.50, valuing the American company at US$3.4 billion (euro2.35 billion).

"We are happy to officially welcome Ventana's employees to the Roche Group and will begin the integration of our businesses immediately," Chief Executive Franz Humer said.

Ventana, which has 800 employees and achieved sales of US$238.2 million (euro164.5 million) in 2006, will keep its headquarters in Tucson, Arizona. The company develops and sells instruments and chemicals used to automatically prepare tissue samples for cancer screening and the testing of new drugs.

Indevus to Halt High Dose of HIV Product

LEXINGTON, Mass. -

Drug developer Indevus Pharmaceuticals Inc. said Friday an independent group of experts recommended the company discontinue the high dosage of its experimental product to prevent HIV.

The product, PRO 2000, is a topical vaginal product under development to prevent the sexual transmission of HIV and other sexually transmitted diseases.

The United Kingdom's Medical Research Council, a human health organization, advised Indevus to close the high-dose group after reviewing data from a Phase III clinical trial of PRO 2000.

An independent data-monitoring committee said the high-dose group in the trial showed only a small chance that the high dose will protect against HIV infection compared with a placebo gel.

The committee, however, recommended the low dosage in the trial continue to be tested for safety and effectiveness.

Shares of Indevus fell 3 cents to $6.10.

German Merck Profit Soars on Serono Deal

FRANKFURT, Germany -

Merck KGaA, the German drug and chemical company whose products include the multiple sclerosis drug Rebif and cancer treatment Erbitux, said Monday that its fourth-quarter profit soared to nearly $5 billion as it reaped the benefits of its acquisition of Serono and the divestiture of its generic drug unit.

The Darmstadt-based company earned 3.39 billion euros ($4.9 billion) in the final three months of 2007 compared with 129.5 million euros a year earlier. Sales more than doubled to 1.8 billion euros ($2.6 billion) in the fourth quarter compared with nearly 1.2 billion euros a year earlier, lifted in part by its purchase of Serono SA.

For 2007, the company's net profit rose to 3.5 billion euros ($5.1 billion) from 1 billion euros in 2006, while sales surged 58 percent higher to 7 billion euros ($10.3 billion). The figures were boosted by Merck's decision to sell its generics unit to Mylan Inc. for 4.9 billion euros in the fourth quarter.

That move, the company said, meant "Merck was able to repay essentially all the debt resulting from the purchase of Serono after less than one year."

Merck Chief Executive Karl-Ludwig Kley said the results - both quarterly and yearly - were clear evidence that its acquisition of Swiss biotech firm Serono was the right decision.

"For Merck, 2007 was a year of major accomplishments - the successful integration of Serono, the sale of generics and a capital increase, resulting in a very low net debt at year end," he said. "We produced the strongest financial results in Merck's long history, allowing us to recommend an increased regular dividend of 1.20 euros ($1.76) and a one-time bonus dividend of 2 euros ($2.93)."

Kley said that given its performance so far and its outlook for 2008 even "in these uncertain economic times, we expect 2008 will be another year of solid growth for Merck." The company said it expects revenue to grow between 5 percent and 9 percent by the end of the year.

The company's pharmaceutical business saw its revenue more than double in 2007 to 4.8 billion euros ($7 billion) from 2.3 billion in 2006, which did not include results from Serono. In the fourth-quarter, sales more than doubled to nearly 1.3 billion euros ($1.9 billion) from a year earlier.

The Merck Serono division, part of the pharmaceutical business, saw its sales more than double to 4.4 billion euros ($6.5 billion) from 1.9 billion in 2006, lifted by the Serono deal. In the fourth quarter, sales were up to 1.1 billion euros ($1.6 billion) compared with 493 million euros a year earlier. The increase was credited to stronger sales of Rebif and Erbitux.

Globally, sales of Rebif - part of the drug development pipeline acquired in the Serono deal - rose 10 percent in 2007 and 11 percent in the last three months of the year. With currency effects added in, sales rose 5.3 percent to 1.2 billion euros ($1.7 billion) for the year and up 5.1 percent to 317 million euros ($465.2 million) in the fourth quarter.

Sales of Erbitux, which it licensed from ImClone Systems Inc., leaped 40 percent in 2007 to 470 million euros ($689.7 million) and were up 33 percent to 127 million euros ($186.4 million) in the quarter.

Its liquid crystals operation, which makes the crystals used in computer displays, saw sales slip 2.2 percent in the fourth quarter to 248 million euros ($363.92 million) but Merck said that revenue from that unit would likely increase 5 percent to 10 percent. For the year, sales rose 2.3 percent to 916 million ($1.3 billion).

Merck said it plans to invest 11 million euros ($16.14 million) in South Korea to set up an advanced technology center aimed at enhancing its liquid crystals research and development efforts and manufacturing in that market.

Shares of Merck fell 2.3 percent to 82.57 euros ($121.05) in Frankfurt trading.

Merck of Germany is the oldest drug company in the world and has been separate from the U.S.-based Merck & Co. since the end of World War I.

FDA: Glaxo Infant Vaccine Appears Safe

WASHINGTON -

Federal regulators said Friday a GlaxoSmithKline vaccine appears safe and effective for stopping the leading cause of diarrhea in infants.

However, Food and Drug Administration officials expressed concern that British drug maker's safety study of the vaccine did not follow U.S. regulations.

Glaxo has asked FDA to approve Rotarix to prevent the rotavirus in infants as young as six weeks old. A panel of FDA advisers will vote on whether to approve the drug next Wednesday.

According to the FDA, Rotarix appears to be free of life-threatening intestinal problems seen with the first rotavirus vaccine approved in the U.S. The Wyeth vaccine RotaShield was pulled from the U.S. market in 1999 after it was linked to an increase in intussusception, a twisting of the intestines.

FDA reviewers said there was no significant increase in the intestinal problems among infants taking Rotarix compared with those taking placebo. But the company adjusted the study's safety goal after recording higher-than-expected rates of intussusception in the placebo group - a change not allowed under U.S. regulations.

"Changing the primary objective while the trial is ongoing could potentially compromise the integrity of the study," the FDA said.

Glaxo was able to make the adjustment because it did the 63,000-patient study in 11 foreign countries, most in Latin America.

Agency reviewers said they were collecting more information from Glaxo to determine to weight the results, according to documents posted online Friday. The agency will seek guidance from its panelists next week, though it is not required to follow their advice.

About 55,000 U.S. children are hospitalized each year due to the rotavirus, according to the Centers for Disease Controls. The U.S. government and several medical societies already recommend infants receive vaccination for rotavirus at two, four and six months.

Rotarix is already available in more than 90 countries worldwide, according to Glaxo.

Shares of GlaxoSmithKline (nyse: GSK - news - people ) PLC rose 65 cents, or 1.5 percent, Friday to $43.97 in midday trading.

Blood Drug Boost Sanofi-Aventis 4Q

PARIS -

Sanofi-Aventis said Tuesday net profit in the fourth quarter rose 31 percent, helped by sales of blood-thinner Plavix in the United States and cost-cutting measures.

The world's third-largest pharmaceutical company by prescription sales said net profit in the three months through December rose to 753 million euros ($1.09 billion) from 575 million euros ($836.16 million) in the same period a year earlier.

Sanofi-Synthelabo and Aventis combined in 2004.

The closely watched profit before merger and restructuring costs was 1.46 billion euros ($2.12 billion), up 6.2 percent from 1.38 billion euros ($2.01 billion) and slightly ahead of analyst expectations.

Last year's net result had been hit by a 214 million euros ($311.2 million) charge.

Sales of the company's top 15 products declined 0.3 percent in the quarter to 4.17 billion euros ($6.06 billion), hit by generic versions of Sanofi's sleeping pill Ambien IR in the United States and its cancer treatment Eloxatin in Europe.

Comparable sales growth excludes the impact of exchange rate movements and changes in the company's structure.

The group's key drugs charted strong performances, with blood-thinner drug Plavix, antithrombotic Lovenox, and diabetes treatment Lantus posting comparable sales growth of 14 percent, 17 percent and 31 percent respectively.

The strong euro weighed on the company's reported sales, reducing them by 4.2 points, Sanofi said.

Sanofi-Aventis will buy back 1.2 billion euros ($1.75 billion) of its own shares before its annual shareholder meeting in May having bought 1.8 billion euros ($2.62 billion) in 2007, Jean-Claude Leroy, executive vice president for finance and legal, told a news conference.

The company's shares opened down 2.9 percent at 53 euros ($77.07).

1st Anti-Inflammatory Pain Patch on Sale

TRENTON, N.J. -

The first pain patch using an anti-inflammatory drug to relieve acute sprains and strains is now available in the U.S. and is intended to produce fewer side effects than similar pills, maker Alpharma Inc. said Wednesday.

The Flector patch contains 180 milligrams of diclofenac, one of the world's most widely used nonsteroidal anti-inflammatory drugs. As a pill, diclofenac is sold under the brand name Voltaren.

The Flector patch, now available by prescription in drugstores across the United States, measures about 4 inches by 5 1/2 inches and is meant for short-term use.

The side effects of anti-inflammatory pills - upset stomach, nausea and potentially dangerous stomach bleeding and ulcers - are reduced with the patch because its puts less pain reliever into bloodstream, Bridgewater, N.J.-based Alpharma Inc. (nyse: ALO - news - people ) said.

It is applied directly to intact skin in the area of an acute injury, such as a muscle or tendon strain, bruise or joint sprain and can be reapplied every 12 hours.

The patch is not for everyone, though. People with heart disease - or risk factors for heart disease - may be at higher risk of serious blood clots, heart attack and stroke if they use the patch, and it should not be used to relieve pain after heart bypass surgery.

The product has been on sale outside the United States since 1993 and is now approved in 43 other countries.

It got marketing approval from the U.S. Food and Drug Administration just last year shortly before Alpharma acquired from a Swiss drug company the rights to sell it in the U.S.

In this country, other prescription pain patches include a powerful narcotic such as fentanyl, and those sold over the counter contain topical pain-relieving oils and gels with ingredients such as menthol and camphor.

Alpharma focuses on pain treatments for people and medicines for livestock.

Alpharma shares were up 5 cents midday Wednesday and trading at $18.75.

FDA Approves High Blood Pressure Tablets

WASHINGTON -

Tablets containing a combination of the blood pressure medication aliskiren and water pill hydrochlorothiazide were approved by the Food and Drug Administration Monday, according to manufacturer Novartis AG.

Sold under the name Tekturna in the United States, the hypertension compound aliskiren was approved last March. It acts by targeting renin, an enzyme responsible for high blood pressure. The newly approved version also includes hydrochlorothiazide, a compound that inhibits the kidney's ability to retain water. This water pill is commonly used to treat high blood pressure.

Tekturna HCT tablets are intended for patients whose blood pressure has not been controlled by a single drug. They will be available in early February the company said.

Side effects associated with the new combination tablets include dizziness, flu-like symptoms, diarrhea, cough, tiredness and skin rashes.

Attempts to reach FDA officials to confirm the approval were not immediately successful.

Tekturna is known as Rasilez outside of the United States.

The company's U.S. affiliate Novartis (nyse: NVS - news - people ) Pharmaceuticals Corp. is based in East Hanover, N.J.

HPV Causing More Oral Cancer in Men

ATLANTA -

The sexually transmitted virus that causes cervical cancer in women is poised to become one of the leading causes of oral cancer in men, according to a new study.

The HPV virus now causes as many cancers of the upper throat as tobacco and alcohol, probably due both to an increase in oral sex and the decline in smoking, researchers say.

The only available vaccine against HPV, made by Merck & Co. Inc., is currently given only to girls and young women. But Merck plans this year to ask government permission to offer the shot to boys.

Experts say a primary reason for male vaccinations would be to prevent men from spreading the virus and help reduce the nearly 12,000 cases of cervical cancer diagnosed in U.S. women each year. But the new study should add to the argument that there may be a direct benefit for men, too.

"We need to start having a discussion about those cancers other than cervical cancer that may be affected in a positive way by the vaccine," said study co-author Dr. Maura Gillison of Johns Hopkins University.

The study was published Friday in the Journal of Clinical Oncology.

Human papillomavirus, or HPV, is the leading cause of cervical cancer in women. It also can cause genital warts, penile and anal cancer - risks for males that generally don't get the same attention as cervical cancer.

Previous research by Gillison and others established HPV as a primary cause of the estimated 5,600 cancers that occur each year in the tonsils, lower tongue and upper throat. It's also been known that the virus' role in such cancers has been rising.

The new study looked at more than 30 years of National Cancer Institute data on oral cancers. Researchers categorized about 46,000 cases, using a formula to divide them into those caused by HPV and those not connected to the virus.

They concluded the incidence rates for HPV-related oral cancers rose steadily in men from 1973 to 2004, becoming about as common as those from tobacco and alcohol.

The good news is that survival rates for the cancer are also increasing. That's because tumors caused by HPV respond better to chemotherapy and radiation, Gillison said.

"If current trends continue, within the next 10 years there may be more oral cancers in the United States caused by HPV than tobacco or alcohol," Gillison said.

Studies suggest oral sex is associated with HPV-related oral cancers, but a cause-effect relationship has not been proved. Other researchers have suggested that even unwashed hands can spread it to the mouth as well.

Gillison pointed toward sex as an explanation for the increase in male upper throat cancers. However, HPV-related upper throat cancers declined significantly in women from 1973 to 2004.

Merck's vaccine, approved for girls in 2006, is a three-dose series priced at about $360. It is designed to protect against four types of HPV, including one associated with oral cancer.

Merck has been testing the vaccine in an international study, but it is focused on anal and penile cancer and genital warts, not oral cancers, said Kelley Dougherty, a Merck spokeswoman.

"We are continuing to consider additional areas of study that focus on both female and male HPV diseases and cancers," Dougherty said.

Merck officials praised Gillison's research, saying it will elevate the importance of HPV-related oral cancers.

Government officials and the American Cancer Society say they don't know yet whether Merck's vaccine will be successful at preventing disease in men. No data from the company's study are available yet.

Indeed, it's not clear yet that the vaccine even prevents the HPV infection in males, let alone cancer or any other illness, said Debbie Saslow of the American Cancer Society.

Merck plans to seek U.S. Food and Drug Administration approval for the vaccine in men later this year, meaning a government decision would be likely in 2009.

Painkiller Patches Recalled

WASHINGTON -

Patches containing the prescription painkiller fentanyl were recalled Tuesday, because of a flaw that could cause patients or caregivers to overdose on the potent drug inside.

Sold in the United States under the brand name Duragesic by PriCara and generically by Sandoz Inc., the recall includes all 25-microgram-per-hour patches with expiration dates on or before December 2009.

Some of the patches may have a cut in the lining of the internal reservoir where the drug is stored in gel form. If the fentanyl gel leaks into the drug's packaging, it could cause a patient or caregiver to come into direct contact with this powerful "opioid" drug. This could result in difficulty breathing and a potentially fatal overdose.

If this reservoir is cut, it can be seen when the foil pouch containing an individual patch is opened. Damaged patches should be flushed down the toilet and not handled. Skin that has been exposed to the gel should be thoroughly rinsed with water, but not washed with soap.

In December, the FDA put out its second warning in two years about the dangers of misusing the powerful drug.

The drug is intended for chronic pain in people used to narcotics, such as cancer patients, and can cause trouble breathing in people not used to this family of painkillers. Yet the FDA found cases where doctors prescribed it for headaches or post-surgical pain.

PriCara estimates that two patches out of every million included in the recall have the defect that causes the leak.

For details on Duragesic patches sold by PriCara, call 800-547-6446. For details on generic fentanyl patches sold by Sandoz, call 800-901-7236.

The recalled patches were also sold in Canada under the Duragesic brand by Janssen-Ortho Inc. and generically by Ranbaxy Laboratories Ltd.

All of the patches were manufactured by PriCara affiliate ALZA Corp. PriCara is a division of Ortho-McNeil-Janssen Pharmaceuticals Inc., a unit of consumer and health care products company Johnson & Johnson.

Schering-Plough Posts $3.4B Loss

NEWARK, N.J. -

The drugmaker Schering-Plough said Tuesday it lost $3.36 billion in the fourth quarter of 2007 because of accounting adjustments related to the purchase of Organon BioSciences NV.

But its results excluding the accounting items topped Wall Street estimates and its shares rose more than 4 percent in morning trading.

Kenilworth-based Schering-Plough Corp. said the loss, which amounted to $2.08 per share for the three months ended Dec. 31, compared with a profit of $182 million, or 12 cents per share, a year earlier.

Without the accounting adjustments, Schering-Plough said it would have had a profit of 27 cents per share in the quarter. Analysts expected earnings without items of 24 cents per share, according to Thomson Financial.

Quarterly revenue rose 40 percent to $3.72 billion from $2.65 billion a year ago and exceeding analyst estimates of $3.1 billion.

The company reported double-digit sales increases in each of its three segments, prescription pharmaceuticals, consumer health care and animal health.

"Schering-Plough delivered another strong performance in both the fourth quarter and full year of 2007," Chairman and CEO Fred Hassan said.

Its shares rose $1.21, or 5.9 percent, to $21.83.

In a conference call with analysts, Hassan and other executives defended its joint venture involving cholesterol drugs Vytorin and Zetia. They acknowledged that U.S. weekly prescriptions have dipped since Jan. 14, when partial results of a study found Vytorin was no more effective at limiting plaque buildup than one of its components, Zocor, now available as an inexpensive generic drug. Vytorin did lower bad cholesterol levels a bit more.

Schering-Plough, which markets Vytorin with Merck & Co. of Whitehouse Station, stands "behind our products and we stand behind our science," Hassan said.

Patients have been exposed to misleading information from a small study that used ultrasound imaging, Hassan said, adding, "The doctors generally knew this was a media-driven situation."

Vytorin remains under study, and Hassan said it is too soon to estimate the impact of the Vytorin matter on the company. However, "We stand ready to take tough actions if tough actions are needed."

The study results triggered potential class-action lawsuits, alleging the companies misled consumers into thinking the drugs were more effective than generics.

Studies have shown Vytorin and Zetia significantly lower LDL, or bad cholesterol, along with a healthy diet.

Vytorin combines Schering-Plough's Zetia and Merck's Zocor. Schering-Plough said the joint venture's fourth-quarter net sales were $1.4 billion, compared to $1.1 billion for the same 2006 period. For 2007, joint venture net sales were $5.1 billion, compared to $3.8 billion in 2006.

The Dutch biopharmaceutical Organon was acquired in November for about $14.43 billion in cash, allowing Schering-Plough to expand its late-stage product pipeline and human health business.

"Today, we are a much stronger and more diverse company than ever before, and we are better positioned to deal with the new challenges confronting us in 2008," Hassan said.

Key profit drivers for Schering-Plough include the arthritis treatment Remicade and the allergy treatment Nasonex. Quarterly Remicade sales rose 35 percent to $455 million, while Nasonex sales rose 7 percent to $271 million.

For the full year, Schering-Plough reported a loss of $1.59 billion, or $1.04 a share, compared to a profit of $1.06 billion, or 71 cents a share, for 2006. Revenue for 2007 rose 20 percent to $12.69 billion, surpassing analyst expectations of $12.07 billion.

Sanofi-Aventis Deal Boosts Dyax Shares

NEW YORK -

Shares of Dyax Corp. surged Tuesday after the pharmaceutical company said it sold Sanofi-Aventis SA rights to develop antibody drugs for a potential $500 million in license fees and milestone payments.

The stock rose 62 cents, or 17.4 percent, to $4.18 in afternoon trading. Shares have traded between $3.15 and $6.95 over the last 52 weeks.

Cambridge, Mass.-based Dyax said it will receive $25 million in 2008 and retain profit-sharing rights to the drugs under development. Its key product under the contract, DX-2240, has potential as a treatment for several types of cancer. Meanwhile, the company's DX-88 lead product candidate, which is still unpartnered, is aimed at treating a potentially fatal genetic disorder called hereditary angioedema.

Pacific Growth Equities analyst Kimberly Lee reaffirmed a "Buy" rating on the stock, saying Dyax will likely continue to garner larger market share for its technology, given the need for pharmaceutical companies to fill their early-stage pipelines.

"The lucrative antibody agreements help validate Dyax's technology platform as well as Dyax's ability to discover novel antibody drug candidates from the platform and to advance the resulting products into development," she wrote in a note to investors.

She said DX-88 has a clear path to a potential FDA filing and that the drug candidate is now more attractive to potential partners.

Meanwhile, Deutsche Bank-North America analyst Jennifer Chao reaffirmed a "Buy" rating with $8 price target.

Teva Bullish on 2008, 2009 Results

NEW YORK -

Teva Pharmaceutical Industries Ltd. said Tuesday its 2008 and 2009 profit and revenue may top Wall Street expectations, despite the generic drug maker's plan to incur significantly higher research and development costs over these years.

Teva forecast 2008 adjusted earnings per share of $2.60 to $2.75 on sales of about $10.75 billion, and reiterated its previous outlook for 2009 earnings-per-share of more than $3. Teva said the guidance takes into account its plan to grow R&D expenses to a range of 1.5 percent of total sales.

On average, analysts polled by Thomson Financial estimate 2008 earnings per share of $2.69 on revenue of $10.46 billion, and 2009 profit of $3.01 per share.

On a conference call with analysts, Teva said its multiple sclerosis drug Copaxone became a market leader in the U.S. in 2007, passing the $1 billion mark for the first time, and it expects the drug to become the global leader in the MS market in 2008.

Separately, the company reported its profit rose 24 percent in the fourth quarter, as the launch of generic Protonix helped drive revenue. During the quarter, Teva rolled out heartburn drug pantoprazole, which is a generic version of Wyeth's drug Protonix.

In a note to investors, Buckingham Research Group analyst David Buck called the guidance "somewhat disappointing given the generic Protonix launch and a lower tax-rate than modeled."

Buck, who downgraded the stock last month on valuation and the departure of North American Chief Executive George Barrett, maintained a "Neutral" rating on Teva shares, considering them range-bound at current levels.

U.S.-listed shares of Israeli-based Teva fell 13 cents to $46.77 in midday trading