Bristol-Myers Squibb to expand activity in Israel

Among the largest and most veteran pharmaceutical companies, Bristol-Myers Squibb Inc. (NYSE: BMY) is one of least well known in Israel. Until recently, it did not have any activity in Israel, and it does not have any significant development agreements with an Israeli company. But behind the scenes, it has been active in Israel for many years, and is now looking to expand its operations."We have decided to expand our activity in Israel following the launching of Yervoy, a drug that treats melanoma," Bristol-Myers Squibb VP and Global Development Lead for Yervoy Rachel Humphrey told "Globes". "We are cooperating with Israeli specialists, who have given us clinical and scientific information and valuable insights. We are currently building a relationship surrounding the drug."Bristol-Myers Squibb is a 150 year-old US company. Legend says that Edward Robinson Squibb, who was a surgeon in the US Navy, was disenchanted with the poor quality of medicines used on US military vessels, and dumped them all in the ocean. In 1858 he started his own pharmaceutics manufacturing business in New York.At the same time, William Bristol and John Ripley Myers invested in a failing pharmaceutical company in New York, and made their first fortune by developing salt laxatives and anti-bacterial toothpaste. A few years later, the three companies merged together to become Bristol-Myers Squibb.The company was involved in various medical fields for years, and recently became more focused and narrowed its activity to medical issues, and sold all non-medical company activity.

China's pharmaceutical market primed to explode

NEW YORK - China's ambitious $124 billion effort to provide basic health coverage for the vast majority of its 1.3 billion citizens by 2011 is a brimming opportunity for large global drugmakers.

As growth in the U.S. and European markets remains sluggish, many giant pharmaceutical companies are expanding their sales forces, distribution channels and research operations in China to tap into the country's robust drug market -- expected to expand at about 22 percent annually over the next five years, said Mandy Chui, senior principal of IMS Health Inc.

Chui is the China expert at IMS Health, which provides market data on the pharmaceutical and healthcare industries.

"We see companies continuing to invest in China because the other markets are not growing," Chui said in an interview. "For companies, (China's growth) is certainly a good story to tell to the Street, right?"

With a huge and aging population, rapid urbanization and adoption of Western lifestyles that give rise to hypertension, obesity and other diseases, China is poised to become the world's third biggest pharmaceutical market by 2013, up from its current No. 5 spot, said Chui.

The $24.5 billion market is expected to swell to $68 billion to $78 billion by 2013, Chui said, leaving it behind only the United States and Japan.

"China is taking over from Germany and France," she said. "It's like a big wake-up call. If they (Big Pharma) are not in there at this point in time, all of them are not going to grow."

In the race to penetrate the China market, she said European drug makers such as Bayer AG, AstraZeneca PLC and Sanofi-Aventis SA have taken the lead.

U.S. drugmakers were once content to grow in their home market but are now eager to "play catch up," she said.

Pfizer Inc Chief Executive Officer Jeff Kindler said on Wednesday that China is an increasingly important priority for the world's biggest drugmaker, which aims to make vaccines a big part of its China effort.

"Not only is it necessary to be there, we are there," Kindler said in a separate interview.

Chui said drugs for diseases commonly seen in China, such as hepatitis B, will have blockbuster potential.

An estimated 30 million of China's people have chronic infections with hepatitis B -- a virus that can lead to cirrhosis of the liver and liver cancer.

Many large pharmaceutical companies have geared up their outreach efforts to increase treatment rate for the liver disease that kills more than 300,000 Chinese a year, Chui said.

Bristol-Myers Squibb Co's hepatitis B drug Baraclude -- a pill introduced in 2006 -- has the clear market lead in China over GlaxoSmithKline PLC's antivirals Heptodin and Hepsera, Bayer AG's Nexavar and several interferons, she said. While no companies have any products of blockbuster scope, which typically means annual revenues of $1 billion or more, in China, Chui said some could arrive within five to 10 years.

Despite the price gap between generics and branded drugs, branded drugs that have lost patent protection still are favored in China as they are often deemed to have better quality and enjoy brand loyalty among large city hospitals, Chui said.

However, drugmakers from the United States, Europe and Japan still have to face tough competition from local Chinese companies, which have stronger sales and distribution channels across China's diverse provinces, especially in remote rural areas.

Chinese companies are clamoring to enter the market once Baraclude loses its patent protection in 2011, Chui said.

More than 30 companies have submitted applications seeking approval of the generic version of the drug, she said.

A Bristol-Myers spokesman, Brian Henry, said: "We have patents in force and patents pending in China (for Baraclude). We do not comment about potential competitors."

Other top-selling drugs in China that are made by multinational companies include blood-clot preventer Plavix, ulcer drug Losec, oral diabetes treatment Glucobay, the Novolin brand of insulin and antibiotic Avelox.

Multinationals currently hold 30 percent of the market with local drug companies taking 70 percent.

"Five years from now, I don't see any substantial change (to that ratio)," Chui said. "The whole pie is growing bigger."

China's health reform effort also includes the construction of 2,000 new county hospitals and upgrades of 30,000 township medical centers.

Chui said expansion of medical infrastructure will benefit makers of medical devices, vaccines and companies that specialize in medical imaging, diagnostics and electronic medical records.

Loss of a Settlement Option

The Federal Trade Commission is an equal opportunity hater. Earlier this month it came out with a report arguing for limited patent protection for drugs made by biotech companies. Now it's ratcheting up its complaints about pharmaceutical and generic-drug companies as well.

In a speech by FTC Chairman Jon Leibowitz, the agency claims that it costs Americans roughly $3.5 billion a year when pharmaceutical companies pay generic-drug companies to stay off the market. You can see how a lack of competition doesn't sit well with an agency that's supposed to encourage it, but the FTC continuing to fight against it isn't a good sign for either side -- or their investors.

The pay-for-delay deals are a win for both pharma and generic-drug companies, as it allows them to avoid court and both get something out of the deal. The FTC has investigated deals to delay generics, including Bristol-Myers Squibb's (NYSE: BMY) Plavix and Cephalon's (Nasdaq: CEPH) Provigil, but courts have generally sided with the companies' right to include payments in the settlements. In fact, earlier this week, the Supreme Court refused to hear a case involving Bayer paying Barr Pharmaceuticals (before Teva Pharmaceuticals (Nasdaq: TEVA) bought it) to not launch a generic version of Bayer's Cipro. The lower courts had upheld the deal.

I'm not sure the FTC's methodology for calculating the $3.5 billion savings is correct; it seems to assume that pay-for-delay deals would have the same results as current deals that don't involve payments. That seems like a big assumption. After all, if the payment option to settle isn’t available, it's possible that generic-drug companies might choose not to challenge some patents, leaving the branded drug alone.

But whether or not the calculation is correct doesn't really matter. What's important for investors is that the FTC isn't backing down and Congress seems to be listening. There's a bill currently making its way through Congress that might outlaw the payments, overriding the court's current opinion of the law.

Fortunately, pharmaceutical and generic-drug companies do have other avenues to settle patent disputes that don't involve payments. To avoid court, companies compromise and the generic-drug maker is allowed to launch at a later date, but before the challenged patent expires. Teva is the king of this, recently settling with AstraZeneca (NYSE: AZN) and Medicis Pharmaceutical (NYSE: MRX), but other generic-drug makers have used this trick, too, including Mylan's (Nadsaq: MYL) recent settlement of patents over Novartis' (NYSE: NVS) Femara.

If you're invested in branded pharma, keep an eye on this, as generic competition might come sooner than hoped. And, if you're invested in generics, know that a revenue stream can always dry up. Both possibilities are bad for those companies and their investors.

Dodd's wife serves on health care company boards

WASHINGTON — The wife of a senator playing a lead role on a national health care overhaul sits on the boards of three health care companies, one of several examples of lawmakers with ties to the medical industry.

Jackie Clegg Dodd, wife of Sen. Chris Dodd, serves on the boards of Javelin Pharmaceuticals Inc., Cardiome Pharma Corp., and Brookdale Senior Living, their Securities and Exchange Commission filings and Web sites show.

Sen. Dodd, D-Conn., is filling in for ailing Sen. Edward Kennedy, chairman of the Health, Education, Labor and Pensions Committee, which will soon start work on a health care bill.

Dodd, who as Senate Banking Committee chairman also has been an architect of the nation's financial industry and housing rescue plans, did not file a new disclosure report outlining his personal finances as most other senators did in May. The Senate was releasing those reports Friday.

Dodd sought a 90-day extension to file his report covering last year, giving him until mid-August to submit his report.

Other publicly available documents show Mrs. Dodd last year was one of the most highly compensated non-employee members of the Javelin Pharmaceuticals Inc. board, on which she has served since 2004. She earned $32,000 in fees and $109,587 in stock option awards last year, according to the company's SEC filings.

Mrs. Dodd earned $79,063 in fees from Cardiome in its last fiscal year, while Brookdale Senior Living gave her $122,231 in stock awards in 2008, their SEC filings show.

A complaint filed by Citizens for Responsibility and Ethics in Washington, a government watchdog group, led the Senate Ethics Committee to begin looking at mortgages that Dodd and Sen. Kent Conrad, D-N.D., received from Countrywide Financial Corp.

The controversy involved a Countrywide "VIP" program for "friends of Angelo," Countrywide's then-chief executive Angelo Mozilo. The SEC filed a lawsuit this month accusing Mozilo of civil fraud and illegal insider trading.

Both senators have denied any wrongdoing. Dodd's mortgages haven't appeared in his public financial disclosure reports and didn't have to because they were for non-rental homes; Conrad disclosed a Countrywide mortgage on a rental property but not one for a vacation home.

Dodd is not the only member of the Senate health committee with ties to health care interests:

_ Sen. Jay Rockefeller, D-W.Va., reported $15,001 to $50,000 in capital gains for his wife from the sale of a stake in Athenahealth Inc., a business services company that helps medical providers with billing and clinical operations.

Rockefeller is honorary chairman of the Alliance for Health Reform, a Washington nonprofit whose board includes representatives from the UnitedHealth Group health insurance company; AFL-CIO labor union; the AARP, which sells health insurance; St. John Health, a nonprofit health system that includes seven hospitals and 125 medical facilities in southeast Michigan; CIGNA Corp., an employer-sponsored benefits company; and the United Hospital Fund of New York.

Rockefeller also serves on the advisory board of the Children's Health Fund, a New York nonprofit focused on pediatric health care, and is an honorary board member of Beckley Health Right Inc., a nonprofit community medical clinic.

_ Sen. Tom Coburn, R-Okla., is a practicing physician. He reported slight business income, $268, from the Muskogee Allergy Clinic last year; $3,000 to $45,000 in stock in Affymetrix Inc., a biotechnology company and pioneer in genetic analysis; $1,000 to $15,000 in stock in Pfizer Inc., a pharmaceutical company; and a $1,000 to $15,000 interest in Thomas A. Coburn, Md., Inc.

Under Senate ethics rules, Coburn can't accept money from his patients.

_ Sen. Judd Gregg, R-N.H., disclosed $1,000 to $15,000 each in stock in pharmaceutical companies Merck & Co., and Pfizer, the Johnson & Johnson health care products company and Agilent Technologies, which is involved in the biomedical industry.

Some members of the Senate leadership also have financial ties to the health industry.

Senate Minority Whip Jon Kyl, R-Ariz., reported $15,001 to $50,000 in stock in Amgen Inc., which develops medical therapeutics. Kyl's retirement account held stakes in several health care businesses, including the Wyeth, Bristol-Myers Squibb Co., GlaxoSmithKline, Pfizer and AstraZeneca pharmaceutical companies; medical provider Tenet Healthcare Corp.; CVS Caremark prescription and health services company; Genentech, a biotherapeutics manufacturer; and insurer MetLife Inc.

Tekmira Stk Jumps On Licensing Pact With Roche >TKM.T

TORONTO (DOW JONES)--Shares of Canadian biotech Tekmira Pharmaceuticals Corp. (TKM.T) got a boost Monday from a drug-development agreement with pharma giant Roche Holding AG (RHHBY).

As reported, Tekmira is licensing its drug-delivery technology, called SNALP, to Roche for its first two products in the field of RNA interference, or RNAi, a promising new class of drugs that's believed to apply to many types of diseases.

If both products make it to Phase I testing, Tekmira would collect $18.4 million, with potential product-development payments of up to $32 million, plus sales royalties after approval.

In an interview, Tekmira's chief financial officer, Ian Mortimer, said the deal demonstrates that the company has leading technology in an important new field. He noted that Roche, which owns a 4% stake in Tekmira, had been studying the company's technology for about a year before committing to the agreement.

While Tekmira has its own RNAi drug candidates in development, with one expected to begin Phase I in the next couple of months, it's signed licensing deals with pharma companies to help finance development of its own pipeline. "We think there's lots of freedom to operate and lots of room for companies to advance products in the RNAi field," he said, adding that Roche isn't the only company that's taken an interest in Tekmira's drug-delivery technology.

Other companies that have licensed Tekmira's intellectual property include Alnylam Pharmaceuticals Inc. (ALNY), Takeda Pharmaceutical Co. (4502.TO), and Merck & Co. (MRK). Bristol Myers Squibb Co. (BMY) and Johnson & Johnson (JNJ) are evaluating the technology.

Mortimer said the company was in good shape financially before the deal, with enough cash to last through the second half of 2010. The Roche deal will "further strengthen" its balance sheet, and the company plans to give more detailed guidance when it reports quarterly results Wednesday.

In Toronto Monday, Tekmira is up 26 Canadian cents, or 27%, to C$1.23 on 231,000 shares. It traded as high as C$1.30 earlier in the session.

How Pharma Stocks Can Heal Your Portfolio Now

Pharmaceutical companies may not have been immune to the weak economy, but its effects on pharma “have not been as dramatic as some of the other sectors,” said Catherine Arnold, senior pharmaceuticals analyst at Credit Suisse.

Pfizer reported a better-than-expected profit as cost-cutting helped offset sharply lower sales of its cholesterol fighter and its anti-smoking drug on Tuesday morning, while Bristol-Myers Squibb said its profit slipped 3 percent, as negative foreign exchange factors and falling sales of its cancer medicine more than offset higher revenue from other medicines.

“Although neither [Pfizer or Bristol-Myers Squibb] are necessarily the major pharmaceuticals that produce anti-viral medicine for pandemics, big drug companies do play a role in having an important mission,” said Arnold.

She named her favorite makers of anti-viral drugs.

Drug Makers Pfizer, Bristol-Myers Post Mixed Results

Drug makers PfizerInc. and Bristol-Myers SquibbCo. reported mixed first-quarter results, as the stronger U.S. dollar dampened sales growth at both companies and generic competition factored into Pfizer's decline.

But both companies' earnings were higher than Wall Street expectations because of cost-cutting measures that included job cuts.

Pfizer said it remained on track to close its acquisition of Wyeth, a cash-and-stock deal valued at about $68 billion when it was announced in January. Pfizer is acquiring Wyeth as its top-selling drug, cholesterol-fighter Lipitor, is set to lose patent protection in 2011.

In the latest quarter, Pfizer reported net income of $2.73 billion, or 40 cents a share, down 2% from $2.78 billion, or 41 cents a share, a year earlier. A higher provision for income-taxes weighed on earnings related to steps taken to finance the Wyeth deal.

The latest quarter included restructuring and acquisition costs, among other items. Excluding items in both periods, earnings fell to 54 cents a share from 61 cents a share a year earlier. Analysts surveyed by Thomson Reuters expected earnings, excluding items, of 49 cents a share.

"The results were driven primarily by discipline on the cost side," J.P. Morgan analyst Chris Schott wrote in a note to clients.

Revenue fell 8.3% to $10.87 billion, short of analysts' estimate of $11.08 billion, hurt by the stronger dollar.

The company's results continues a first-quarter trend among major drug makers of exceeding earnings estimates but falling short on the top line.

The stronger dollar is of special concern to Pfizer, which gets 54% of total revenue from abroad. Non-U.S. revenue dropped 7%, reflecting a 10 percentage point hit. U.S. revenue took a hit, too, declining 10%.

Pfizer is in intense competition with generic versions of such products as cancer treatment Camptosar, which lost U.S. exclusivity last year.

Lipitor sales, meanwhile, continue to drop as use of generic cholesterol drugs like simvastatin increases. Global sales of Lipitor declined 13% to $2.72 billion, while U.S. sales fell 17%.

Pfizer Chief Executive Jeff Kindler said Pfizer the company faced "a challenging and dynamic economic and competitive environment."

Overall, Pfizer's pharmaceutical sales dropped 7%.

Sales for the Chantix smoking-cessation drug declined 36% amid safety concerns, while arthritis drug Celebrex saw an 8% sales contraction. A continued source of growth was pain drug Lyrica, whose sales rose 17%.

Pfizer's animal-health sales fell 13% to $537 million.

Pfizer lowered its forecast for reported 2009 earnings to reflect costs related to the purchase of Wyeth. It now sees full-year earnings of $1.20 to $1.35 a share, from a prior forecast of $1.34 to $1.49 a share. It still expects earnings, excluding items, of $1.85 to $1.95 a share.

At Bristol-Myers, quarterly net income rose 3.4% to $921 million, or 32 cents a share, compared with $891 million, or 33 cents a share, a year earlier. Per-share earnings declined despite an increase in net income due partly to accounting for earnings "attributable to noncontrolling interest."

The latest quarter included restructuring costs and a charge to cover a settlement of securities litigation stemming from Bristol's attempt to settle a patent dispute over anticlotting drug Plavix in 2006. Excluding items, earnings from continuing operations came to 48 cents a share, compared with 39 cents a share. Analysts had expected 47 cents a share for the latest quarter.

Net sales rose 2.5% to $5.02 billion. Excluding the impact of the stronger dollar, sales were up 8%

Pharmaceutical sales increased 3.2%, rising 13% in the U.S. International sales fell 11%.

Sales of the company's biggest money-maker, anticlotting agent Plavix, rose 9.7% to $1.44 billion. Antipsychotic drug Abilify posted a 30% jump in sales. The product, which has quickly become Bristol's No. 2 seller, is crucial to the company's plan to reduce its dependence on Plavix.

While other pharmaceutical companies have tried to grow bigger and diversify into nonpharmaceutical operations, Bristol has shed nondrug assets and tightened its focus on biotech and so-called specialty-pharmaceutical drugs. In February, Bristol-Myers sold a minority stake in Mead Johnson NutritionCo., which sells Enfamil baby formula, through an initial public offering.

The moves have left Bristol flush with cash -- roughly $8 billion -- that the company plans to use to make acquisitions to beef up its pipeline and product lineup.

Bristol-Myers reports moderately higher profit

BOSTON Bristol-Myers Squibb Co. reported moderately higher first-quarter earnings Tuesday, boosted in part by improved gross margins, but revenue fell short of Wall Street expectations.

Shares of Bristol-Myers skidded 3% to $19.92 by late morning.

Bristol-Myers (BMY:

19.82, -0.72, -3.5%) posted net income of $921 million, or 32 cents a share, compared with $891 million, or 33 cents, earned in the first three months of 2008.

The company had about 1% fewer average common shares outstanding in the latest quarter compared with the same period a year earlier.

Excluding various items, New York-based Bristol-Myers would have reported adjusted earnings of 48 cents a share. For the 2008 quarter, the company's earnings from continuing operations came to 39 cents a share.

Sales generated during the latest quarter rose 3% to a lower-than-projected $5.02 billion, up from the prior year's $4.89 billion. Excluding dollar translations, sales would have been up 8%, the company said.

Analysts surveyed by FactSet Research had been looking for Bristol-Myers to report first-quarter earnings of 48 cents a share as well as revenue of $5.14 billion.

Quarterly sales of blood thinner Plavix, the company's top-selling product, reached $1.44 billion, up 10%. Plavix is co-marketed with Sanofi-Aventis (SNY:

27.17, -0.06, -0.2%) .

Another big seller, antidepressant Abilify saw sales climb 30% to $589 million in the latest three months.

In a recent research note, Deutsche Bank pharmaceuticals analyst Barbara Ryan said she saw sales of Plavix rising 6% for the quarter to $1.39 billion, while Abilify sales were pegged to leap 37% to $620 million.

Meanwhile, gross margins widened nearly to 72% from 68% in the year-earlier quarter, the company said.

Bristol-Myers also confirmed its 2009 financial forecast calling for earnings of between $1.58 and $1.73 a share as well as adjusted earnings in a range of $1.85 to $2 a share.

In February, Bristol-Myers spun out a portion of Mead Johnson Nutrition Co. (MJN:

29.00, +2.75, +10.5%) into a publicly traded company. The drugmaker retains an 83% equity stake in Mead. 

Type 2 Diabetes Drug Cleared by FDA

The U.S. Food and Drug Administration has approved Glucovance (glyburide and metformin tablets) by Bristol-Myers Squibb for the treatment of type 2 diabetes.

Glucovance is indicated for use in initial type 2 diabetes therapy, along with diet and exercise, and also as second-line therapy in patients with type 2 diabetes who are currently taking either Glucophage (metformin) or a sulfonylurea and following a regimen of diet and exercise, but whose blood sugar levels are inadequately controlled.

Glucovance combines glyburide and Glucophage, which are two of the most widely prescribed oral medications for diabetes, in a single pill.

Glucovance will be available in three dosing strengths: 1.25 mg/250 mg (glyburide/metformin) tablets, 2.5 mg/500 mg tablets and 5 mg/500 mg tablets.