GSK to invest £200m in UK manufacturing plants

GlaxoSmithKline is to invest approximately £200m on advanced manufacturing in the UK to support the delivery of its pipeline and to create a centre for pharmaceutical manufacturing innovation.

The firm's plants in Ware, Hertfordshire and Worthing, West Sussex will be upgraded with new state-of-the-art equipment. In addition GSK will establish a new facility using innovative technologies that could transform both the way medicines are made and the company’s supply chain.

Roger Connor, GSK’s President of Global Manufacturing and Supply, said the new investments are in addition to last year's announcement that GSK would build its first new UK factory for 40 years in Ulverston, Cumbria.

He said the upgrades would allow the firm 'to harness new technologies that have the potential to deliver a step-change in how we make medicines'.

These new technologies could significantly reduce costs, improve quality and enable the manufacture of medicines in weeks rather than years, he added.

The new manufacturing facility in Ware will produce the Relvar Ellipta inhaler for respiratory disease before it is exported worldwide.

The Ware plant employs 800 staff, of whom more than 500 make respiratory products including Relvar/Breo. The site exports more than 35 million packs of respiratory products to 120 countries, as well as shipping more than 400 million tablets a year.

In Worthing, a new bulk sterile building and filling line will be built for the company’s leading antibiotic medicine Augmentin, which is exported to 150 countries.

The Worthing site has more than 950 employees making both active ingredients and finished medicines. In the last full year the plant supplied more than 100 million packs of medicines and more than 1,000 tonnes of bulk products.

The new centre for manufacturing innovation will turn emerging science and technologies into practical manufacturing applications. These technologies will range from mimicking nature using enzymes and biologically inspired catalysts to using nano-technologies to create intelligent drug product formulations which minimise side-effects and enhance efficacy.

Charity to link with pharmaceutical

International development charity Save the Children is linking up with British pharmaceutical giant GlaxoSmithKline in what both sides say is a unique collaboration to save children's lives in Africa.

GSK will provide £15 million over five years to train healthcare workers and fund Save the Children community projects in the Democratic Republic of Congo and Kenya.

The charity will take a seat on a new GSK board overseeing its paediatric research and development "to accelerate progress on innovative life-saving interventions for under-fives" and widen access in the developing world, they said in a joint statement.

Save the Children admitted the tie-up would be controversial given criticism - that it once voiced - that the pharmaceutical giant charges too much for its drugs in developing countries.

"In the past Save the Children may not have embarked on a collaboration with a pharmaceutical company like GSK," Justin Forsyth, chief executive of the charity, admitted.

"But we believe we can make a huge difference if we harness the power of GSK's innovation, research and global reach."

Under the partnership, GSK will look into reformulating the antiseptic chlorhexidine, currently found in mouthwash, into a product that could be used to cleanse the umbilical cord stump on newborn babies.

Studies from South Asia suggest this could prevent up to one sixth of newborn deaths in high-risk areas, Save the Children and GSK said.

The pharmaceutical company will also step up the distribution of an antibiotic in powder form that could treat childhood pneumonia, which currently kills 1.4 million under-fives globally.

Save the Children's on-the-ground expertise will be vital in deciding how such products can be distributed, from the language on the packaging to the weather and conditions in the target areas, the company said.

GSK will fund the development of the products and said it would sell them at cost price.

"A partnership of this scale gives us an opportunity to do something amazing - to save the lives of one million children and to transform the lives of millions more," said GSK's chief executive, Andrew Witty.

The £15 million includes £1 million to be raised by GSK employees, and will see £9 million given to projects in DR Congo and £4 million for projects in Kenya.

Rohit Malpani, director of policy for Medecins Sans Frontieres, said: "The real understanding of how effective this partnership is, is whether or not companies like GSK put access to medicines at the heart of their business models."

Malpini said that although drugs companies had improved their pricing practices over the past decade, it was a small step from a very low base.

"People are still paying too high prices, innovation has not truly changed to benefit low-income countries," he said.

Pharmaceutical Firms Widen Search for Medicines

The drug company GlaxoSmithKline employs 12,687 people in its research and development division to search for and test new drugs. Despite that huge staff, around half of the company's $6.3 billion R&D budget goes to people who don't work for Glaxo at all. 

The money instead flows to companies like Epizyme, a small biotechnology firm that, since last year, has received $24 million from Glaxo to support research on a novel type of cancer drug. That's money the biotech firm needs to survive, and if its efforts yield a drug, that would be a success for Glaxo, too. 

Drug companies have always kept ties with academics and done deals with biotech firms. But the search for outside ideas has never been as urgent or as wide as it is today, say drug industry officials. The reason is the plummeting productivity of in-house research. Compared to 1980, the drug industry today spends 10 times as much money on R&D (even accounting for inflation), yet the number of novel drugs getting approved by the U.S. Food and Drug Administration has remained flat, at around 23 per year. 

Glaxo's efforts to outsource (or "externalize," as they say in the industry) its R&D isn't only a result of its own labs' waning success in finding drugs. Funding for biotech companies from venture capitalists and IPOs has been drying up as well, and companies like Glaxo now worry that if they don't do more to support smaller enterprises, they might not have as many promising drugs to bid on.

Pharmaceutical giant to pay $3 billion in criminal fraud case

GlaxoSmithKline LLC will pay $3 billion and plead guilty to promoting two popular drugs for unapproved uses and to failing to disclose important safety information on a third in the largest health care fraud settlement in U.S. history, the Justice Department said Monday.

Accompanying the criminal case was a civil settlement in which the government said the company's improper marketing included providing doctors with expensive resort vacations, European hunting trips, high-paid speaking tours and even tickets to a Madonna concert.

The $3 billion combined criminal-civil fine will be the largest penalty ever paid by a drug company, Deputy Attorney General James M. Cole said. The corporation also agreed to be monitored by government officials for five years to attempt to ensure the company's compliance, Cole said.

"Let me be clear, we will not tolerate health care fraud," Cole told a news conference at the Justice Department. He would not say whether any company executives were under investigation. The company's guilty plea and sentence have to be approved by a federal court in Massachusetts.

"For far too long, we have heard that the pharmaceutical industry views these settlements merely as the cost of doing business," Acting Assistant Attorney General Stuart F. Delery, head of Justice's civil division, said at the news conference. "That is why this administration is committed to using every available tool to defeat health care fraud."

Delery added, "Today's resolution seeks not only to punish wrongdoing and recover taxpayer dollars, but to ensure GSK's future compliance with the law." He noted that a similar recent settlement with Abbott Laboratories also included continuing compliance monitoring.

GlaxoSmithKline CEO Sir Andrew Witty expressed regret and said they have learned "from the mistakes that were made."

"Today brings to resolution difficult, long-standing matters for GSK," he said in a statement. "Whilst these originate in a different era for the company, they cannot and will not be ignored."

Crimes and civil violations like those in the GlaxoSmithKline case have been widespread in the pharmaceutical industry and have produced a series of case with hefty fines. One reason some have said the industry regards the fines as simply a cost of doing business is because aggressively promoting drugs to doctors for uses not officially approved - including inducing other doctors to praise the drugs to colleagues at meetings - has quickly turned numerous drugs from mediocre sellers into blockbusters, with more than $1 billion in annual sales.

In the last few years, the Justice Department has become much more aggressive in pursuing such fraud, often in whistleblower cases taken on by a handful of U.S. attorneys focused on such fraud. Among the most active are the U.S. attorneys in Boston, Philadelphia and San Francisco - all in regions with numerous pharmaceutical and biotech company operations.

The prior record-setting case involved Pfizer Inc., the world's biggest drugmaker. Pfizer paid the government $2.3 billion in criminal and civil fines for improperly marketing 13 different drugs, including Viagra and cholesterol fighter Lipitor. Pfizer was accused of encouraging doctors to prescribe its drugs with free golf, massages, and junkets to posh resorts.

It is illegal to promote uses for a drug that have not been approved by the Food and Drug Administration - a practice known as off-label marketing.

Prosecutors said GlaxoSmithKline illegally promoted the drug Paxil for treating depression in children from April 1998 to August 2003, even though the FDA never approved it for anyone under age 18. The corporation also promoted the drug Wellbutrin from January 1999 to December 2003 for weight loss, the treatment of sexual dysfunction, substance addictions and attention deficit hyperactivity disorder, although it was only approved for treatment of major depressive disorder.

Justice Department officials also said that between 2001 and 2007 GlaxoSmithKline failed to report to the FDA on safety data from certain post-marketing studies and from two studies of the cardiovascular safety of the diabetes drug Avandia. Since 2007, the FDA has added warnings to the Avandia label to alert doctors about potential increased risk of congestive heart failure and heart attack.

The drug corporation also agreed to resolve civil liability for promoting the drugs Paxil, Wellbutrin, Advair, Lamictal and Zofran for off-label, non-covered uses. In the civil settlement, the government said Advair was promoted as a first-line therapy for mild asthma though not approved for that and for chronic obstructive pulmonary disease with misleading claims. It said the anti-epileptic medicine Lamictal was promoted for off-label psychiatric uses, neuropathic pain and pain management. And it said certain forms of Zofran, approved only for post-operative nausea, were promoted to treatment of morning sickness in pregnant women.

The company also resolved accusations that it paid kickbacks to doctors to prescribe those drugs as well as the drugs Imitrex, Lotronex, Flovent and Valtrex.

"GSK's sales force bribed physicians to prescribe GSK products using every imaginable form of high priced entertainment, from Hawaiian vacations to paying doctors millions of dollars to go on speaking tours to a European pheasant hunt to tickets to Madonna concerts, and this is just to name a few," said Carmin M. Ortiz, U.S. attorney in Massachusetts.

Of the penalties, $1 billion covers criminal fines and forfeitures and $2 billion is for civil settlements with the federal government and the state governments of Massachusetts and Colorado.

In a statement, GlaxoSmithKline said it disagreed with some statements the Justice Department made in court papers. For example, the company said its settlement with the government does "not constitute an admission of any liability or wrongdoing in the selling and marketing of Lamictal, Zofran, Imitrex, Lotronex, Flovent, Valtrex, Avandia or Advair products. The government also made allegations about Paxil, Wellbutrin that the company did not admit."

"The civil settlement agreement contains many allegations that are either inaccurate or incomplete, that selectively tell only parts of the story, and that draw unwarranted conclusions from disputed facts," the company said.

Glaxo's £500m investment to create 1,000 manufacturing jobs for pharmaceutical industry

Britain's £10billion pharmaceutical industry was given a welcome boost yesterday as drugs giant GlaxoSmithKline announced plans to create 1,000 jobs. The company, which employs 15,000 UK workers, confirmed it is pumping £500million into its manufacturing sites.

This includes building a new factory at Ulverston, Cumbria – the firm’s first in 40 years.

GSK’s move was influenced by tax cuts in the Budget on money invested in research and development.

Sir Andrew Witty, GSK’s chief executive, said the introduction of a ‘patent box’, which cuts corporation tax rates on profits from UK innovations, fuelled the decision.

As well as building the new factory, it will inject £100million into Scottish sites at Irvine and Montrose, and £80million at its site in Ware, Hertfordshire, to boost capacity for inhalers and at Barnard Castle, County Durham

GSK faces legal charge of £2.2bn

GlaxoSmithKline faces a legal charge of £2.2bn for the fourth quarter, effectively wiping out its profit, as it settles further claims related to diabetes drug Avandia (rosiglitazone) and sales practices in the US.

The charge equates to an after-tax cost of £1.8bn, which is more than the £1.45bn GSK had been expected to make in net income during the three months ending December 2010.

The charge relates to the estimated settlement from an investigation led by the US Attorney’s Office for the District of Colorado for US sales and promotional practices of drugs including Avandia and antidepressant drug Paxil between 1997 and 2004.

‘We recognise that this is a significant charge, but we believe the approach we are taking to resolve long-standing legal matters is in the company’s best interests,’ said PD Villarreal, GSK’s head of global litigation.

‘We have closed out a number of major cases over the last year and we remain determined to do all we can to reduce our litigation risk.’

In July, the UK drugmaker said it would record a charge of £1.57bn in the second quarter to cover the cost of settling ongoing legal disputes.

GSK has continued to receive new product liability cases regarding Avandia in the US.

GSK & JSC Binnopharm enter vaccine production alliance in Russia

GlaxoSmithKline (GSK) and JSC Binnopharm announced an alliance to enable the local secondary manufacture of a number of GSK vaccines in Russia. The agreement was signed in Moscow during the session of the Russian-British Intergovernmental Steering Committee (ISC) for Trade and Investment.

Under this alliance, GSK will supply bulk vaccine and provide technology and expertise to enable Binnopharm to undertake the secondary manufacture, including filling and packaging of a number of innovative GSK vaccines in accordance with international current Good Manufacturing Practice (cGMP) standards. Binnopharm will be responsible for gaining approval of their facilities to allow supply of GSK cervical cancer, rotavirus and pneumococcal vaccines under Binnopharm's trademark for the Russian public market.

The local manufacture of these vaccines should help Russia to modernise its National Immunisation Calendar in the future, adding additional vaccination against highly prevalent infections such as Human Papillomavirus (HPV), rotavirus and Streptococcus pneumoniae.

GSK will book sales of the bulk vaccine supplied to Binnopharm through this alliance. No further financial details of the agreement have been disclosed.

Global drug majors bid for India's Paras

A clutch of global pharmaceutical majors have tendered bids for a majority stake in Indian drug-maker Paras Pharma , a report said Tuesday.

British giant GlaxoSmithKline , France's Sanofi-Aventis, Swiss multinational Novartis, and US-based Johnson and Johnson have all made bids for the over-the-counter drug major, reports said, citing sources close to the bidding process.

The initial bids ranged between the 600 and 700 million-dollar mark, one source told the newspaper, undershooting the expected valuation of close to one billion dollars.

"Serious players such as Japan's Taisho Pharmaceuticals are expected to join the race," one of the sources added.

Paras owns popular brands in the Indian market like anti-cold medication D'Cold and pain-relieving ointment Moov.

A Novartis spokesman contacted by AFP refused to comment on the report.

State Reaches $82M Drug Settlement

The state of Hawaii has reached an $82 million settlement with pharmaceutical companies accused of over-charging the state's Medicaid program.In 2006, the state sued more than 40 pharmaceutical companies in an effort to stem soaring drug prices. The state accused the companies of fraudulently submitting inflated average wholesale prices to Hawaii.The case dragged on for four years before the drug companies settled."This scheme went on for more than a decade, but the feds didn't see it. We didn't see it," Hawaii Attorney General Mark Bennett said. "We did go after it vigorously and I think the recovery is a deterrent to this happening again."

Settlement Breakdown:

Merck Sharp & Dohme Corp. $28 million
AstraZeneca Pharmaceuticals LP, AstraZeneca LP, GlaxoSmithKline LLC, and Novartis Pharmaceuticals Corp. will collectively pay $10 million
Pfizer Inc. and Pharmacia Corp. will collectively pay $8.2 million
Teva Pharmaceuticals USA Inc., Barr Laboratories Inc., Ivax Corp., Ivax Pharmaceuticals Inc., and Sicor Pharmaceuticals Inc. will collectively pay $6.5 million
Johnson & Johnson, Janssen Pharmaceutical Products, Ortho Biotech Products, McNeil-PPC Inc. and Centocor Inc. will collectively pay $5.2 millionMore than $12 million will go toward attorneys' fees.A substantial portion will of the settlement will also go to the federal government, which paid a large amount of the drug costs. It is unclear how much the state will receive, but any settlement money will go into the state's general fund.

Pharmaceutical firm to lay off 121 staff

CORK’S PHARMACEUTICAL sector suffered another jobs blow yesterday when GlaxoSmithKline (GSK) announced it is to lay off 121 staff from its 460 strong workforce at its plant at Currabinny in Cork Harbour.

Some 55 of the redundancies are as a result of a formal business review by the company which has been ongoing since May 2010 while a further 66 jobs are being lost as a result of changes to shift patterns at the Cork plant.

GSK vice-president and Cork site director Finbar Whyte said the 121 redundancies were designed to ensure the company remains competitive in response to changing market situations and represented “the best strategic route for the Cork site and for GSK overall”.

Mr Whyte confirmed the reductions would take place among the 370 staff employed at the company’s manufacturing operations at Currabinny. He said 90 staff working at the site’s research and development facility would not be affected by the cuts.

The company is in consultation with trade unions and employee representatives and no timeframe had been finalised for the lay-offs at the plant which has been in existence since the 1970s and which saw employment numbers peak at over 650 in 2006/2007.

Yesterday’s announcement followed staff briefings by management on activity levels and the continuing decline in demand for some of the company’s products which led in February 2008 to a cost containment programme at the Cork plant.

Last week the European Medicines Agency recommended that GSK’s diabetes drug Avandia be withdrawn from the Irish and European markets because of concerns about the drug’s links with heart attacks while the drug is also under review by the Federal Drugs Administration in the US.

Currabinny is the sole manufacturing site within GSK for the active ingredient for Avandia, rosiglitazone, but it is understood that the plant had already frozen production of the active ingredient since 2008 because there were sufficient stockpiles to meet falling demand.

Two years ago when announcing 100 job cuts at the plant which then had 500 staff, Mr Whyte confirmed falling sales globally for some of the plant’s other products including anti-depressant Seroxat, congenital heart treatment Coreg and Parkinson’s disease medicine Requip.

In November 2008, GSK unveiled a new breast cancer therapy, Lapatinib, which was to be manufactured only at Currabinny but production of the drug is not expected to ramp up in the immediate future.

Local Cork South Central Fine Gael Senator Jerry Buttimer described the announcement as “a devastating blow for the local community” while Cork South Central Fine Gael TD Deirdre Clune said it highlighted Government inaction on Ireland’s competitiveness problems.

Cork Chamber CEO Conor Healy said that while the news of the job losses at GSK was very disappointing, it was important to remember the move was being made to ensure the plant remained competitive and put in a better position with regard to its longterm future. Less than a month ago, pharmaceutical firm Schering-Plough said it would lay off 160 staff at its plant at Brinny near Innishannon in west Cork.

Venture Firms Feel The Pain With GlaxoSmithKline Spin-Off

Pharmaceutical companies are reevaluating their portfolios and dispensing with products that are no longer priorities. That is creating opportunity for venture firms to launch companies around compounds that have been studied extensively.

After GlaxoSmithKline PLC decided to exit neurological fields such as pain and depression in February, three venture capital firms jumped on the chance to carve out a business from GSK focused on the pain market. These firms - Apposite Capital, New Leaf Venture Partners and SV Life Sciences - injected $35.4 million in Series A financing for the new company, called Convergence Pharmaceuticals Ltd., to finance Phase II proof-of-concept studies for a treatment for chronic, neuropathic pain.

New Leaf especially appears to be making the most of these cast-offs. Last year, the firm teamed up with Domain Associates, Pappas Ventures and Third Rock Ventures to invest in $23 million in Afferent Pharmaceuticals Inc., which spun out of Roche Holding Ltd. late last year to attack chronic pain in a new way.

New York-based New Leaf also joined Domain, Aisling Capital, Canaan Partners and Sofinnova Ventures in December to acquire an antibiotic from Pfizer Inc. that has been tested in more than 1,000 subjects. The investors now plan to drive this drug, dalbavancin, through Phase III clinical trials. That opportunity came about after Pfizer acquired Wyeth in October.

Drug manufacturers once feared embarrassment if they let go of an asset that turned into a success. But through mergers and internal discoveries, most have now accumulated far more drugs than they can develop. Instead of letting them idle, many are looking to sell or license them out.

In Convergence’s case, GSK began research that led to the pain drugs in the late 1990s, according to Chief Executive Clive Dix, who headed U.K. research for the company at the time. Strong demand exists for pain medicines that work through new mechanisms of action. Convergence hopes its lead product, a sodium-channel blocker called CNV1014802, will be just that.

Though GSK still owns 18% of Convergence, it does not have any rights to the company’s products, Dix said. He previously led venture-backed PowderMed Ltd. to a merger with Pfizer Inc. in 2006.

Convergence’s team also includes Chief Scientific Officer Simon Tate, who previously was vice president in the pain and epilepsy discovery performance unit within GSK’s Neurosciences Center of Excellence for Drug Discovery.

GSK, Valeant get positive opinion from FDA committee on anti-epileptic drug ezogabine

GlaxoSmithKline (GSK) and Valeant Pharmaceuticals International announced that a US Food and Drug Administration (FDA) advisory committee voted unanimously that clinical studies had provided substantial evidence of the effectiveness of ezogabine as adjunctive treatment for adults with partial-onset seizures.

After a review of the safety data, including urinary retention, infection and kidney stones, the majority of Committee members voted that urinary retention could be mitigated by patient monitoring and discussed how this could be addressed. The Committee also voted unanimously that monitoring should not be instituted for infection and kidney stones.

"We are encouraged by the Advisory Committee's assessment of the efficacy and safety of ezogabine and await a decision by the FDA," said Atul Pande, senior vice president, Neurosciences Medicines Development Center, North America Pharmaceuticals, GlaxoSmithKline. "For appropriate patients, we believe ezogabine could offer an important adjunctive treatment option for partial-onset seizures that are not well-controlled."

GSK executive takes over as CEO at Philadelphia pharmaceutical firm

RESEARCH TRIANGLE PARK, .N.C – Amber Salzman, former senior vice president of operations for medicines development at GlaxoSmithKline (NYSE: GSK), is the new chief executive officer at Cardiokine.

The privately held firm is based in Philadelphia.

Salzman also will be a member of the Cardiokine board. She has 25 years of experience in the pharmaceutical industry, including a lead role in establishing GSK’s development support center in India.

“Amber’s record of accomplishment and her passion to develop new medications for patients in need make her particularly well suited to lead Cardiokine during this next promising period in the company’s history,” said James Cavanaugh, the chair of the Cardiokine board.

Cardiokine, which has had three CEOs over the past three years according to the Philadelphia Business Journal, has a drug candidate in Phase III clinical trials targeting cardiovascular disease. It is partnering with Biogen in developing the compound called Lixivaptan.

GSK employs some 4,000 people in the RTP region where it maintains its U.S. headquarters.

Drug giants step up production

PRODUCTION of the new Pandemic (H1N1) 2009 vaccine is in full swing. With clinical trials completed or on the verge of completion, most manufacturers are waiting for the green light from authorities before the vaccines are shipped out.

With the expected high demand for the vaccine, production has to be ramped up to ensure there is enough to meet global demand. The World Health Organisation (WHO) had earlier identified 24 countries with facilities to produce the vaccine and provided them with the seed virus – weakened form of the virus that will be used in the vaccine.

Malaysia has placed an order of 400,000 doses with pharmaceutical giant GlaxoSmithKline (GSK) and will be obtaining an initial 40,000 doses in October, with the remainder in January next year.

According to Francis Del-Val, vice-president and managing director of GlaxoSmithKline Pharmaceutical Sdn Bhd, the company has more than 10 years of investment in research and development of pandemic influenza vaccines.

“GSK is making rapid progress to produce the vaccine. We are investing heavily in increasing our capacity to help governments and other organisations to respond to a global influenza pandemic,” he says.

Similarly, Sanofi Pasteur (SP) has been well prepared for any pandemic situation. SP, a member of the Sanofi-Aventis Group, is the largest producer of seasonal influenza vaccines in the world, producing 40% of global supply.

“Our organisation has specific plans in place to ensure we can continue production of our vaccines and begin full-scale pandemic influenza vaccine production when directed,” says Sanofi Pasteur medical manager Dr Shree Jacob.

But they do not yet know for sure how many doses can be produced as there are factors yet to be determined, such as the actual effective dosage required.

“We will be able to answer this question better once we have experience with it in a production environment and once clinical studies have been conducted.

“We estimate our contribution will be in line with our current capacity for seasonal vaccine,” she adds.

Says Del-Val: “Volume capacity will depend on various factors such as the manufacturing yield that can be achieved from the strain and the production time required. The manufacturing process for this strain will be stringently evaluated and improved where possible. The total capacity will be determined as a result of these ongoing efforts.”

Both GSK and SP began large-scale production of the vaccine in June, with clinical trial results expected by October for SP while GSK received the results from its first clinical trial on Sept 14 (from Germany). SP’s trial involved 6,000 volunteers and GSKs 9,000.

While production of the H1N1 vaccine is ongoing, the seasonal vaccine is not being set aside.

“Production of seasonal influenza vaccine for both northern and southern hemispheres is still a priority as seasonal influenza is a very serious illness causing an estimated 250,000 to 500,000 deaths per year. The decision to prioritise southern hemisphere seasonal influenza vaccine production over H1N1 should be taken by WHO and the authorities in due time,” says Dr Jacob, adding that the recommendation for southern hemisphere influenza vaccine strains is usually decided by WHO in September.

More importantly, both companies will ensure that their vaccines will be accessible to the poorer countries.

“Once production of the A(H1N1) vaccine begins, SP will reserve 10% of its output as a donation to WHO to help address the threat of a pandemic in developing countries. In the event that Sanofi Pasteur’s manufacturing facilities become fully committed to the production of pandemic vaccine, we will supply this vaccine under a tiered-pricing policy for developing countries,” says Dr Jacob.

GSK is adopting similar steps.

“To ensure that the vaccine is available to developing nations, the company has allocated 20% of production at its Canadian manufacturing site to developing countries. Included within this capacity is GSK’s proposed donation of 50 million doses of the H1N1 vaccine to WHO,” says Del-Val.

Sun Pharmaceutical's Generic Cancer, Migraine Drugs Get US OK

BANGALORE, India -Sun Pharmaceutical Industries Ltd. (524715.BY) said it has received approval from the U.S. Food and Drug Administration to manufacture and sell generic versions of a cancer drug and migraine tablets.

Sun said it shares with other companies 180 days of marketing exclusivity for 50-milligram and 100-mg doses of oxaliplatin injection, a generic version of Sanofi-Aventis U.S. LLC's Eloxatin used in the treatment of colon and rectal cancer.

The drug has annual sales of about $2.3 billion in the U.S., Sun said in a statement late Tuesday.

The company has also received approval for 25-mg, 50-mg and 100-mg doses of sumatriptan succinate tablets, a version of GlaxoSmithkline PLC's (GSK) Imitrex, which is indicated for the treatment of acute migraine.

FDA Heat Fails to Scorch Appeal of Indian Pharma

BANGALORE -- Some Indian pharmaceutical companies are facing increased regulatory scrutiny in developed markets and that's perking up the view on the sector.

Generic drug makers like Ranbaxy Laboratories Ltd., Sun Pharmaceutical Industries Ltd., and Lupin Ltd. are in trouble with authorities in the U.S. over issues such as the quality of test data and manufacturing practices at their plants in India and abroad.

These companies are now scrambling to improve standards. As a result, they will be in a better position to increase their business over the next five years when $100 billion worth of drugs will go off-patent, say analysts.

With manufacturing costs nearly 40% lower in India than in the West and the global drive to cut healthcare expenses, India's generic drugmakers are unlikely to lose, they say.

Although competition from other countries such as Israel and China is increasing, India has an advantage in that it has 107 plants approved by the Food and Drug Administration, the highest number outside the U.S., and thrice the number in China.

"These plants are cost competitive. I think that's a huge value proposition," said Hitesh Gajaria, executive director at KPMG, who is bullish on India's generic drug makers.

Stocks in the sector have recovered most of the losses incurred in the wake of the FDA moves. Shares of Lupin, which said May 13 that it had received a warning letter from the FDA for not giving a satisfactory response to some non-compliance issues, have risen 21% since. The benchmark Sensex has risen 28% in the same period.

Lupin, India's fifth-largest drug firm by revenue, sells both generic drugs as well as branded products in the U.S., a market that accounts for about 35% of its revenue.

Following the FDA move, Lupin appointed a consultant to advise it on the regulator's quality requirements. It is also upgrading equipment to improve quality control methods.

Shares of Sun Pharma, the fourth-largest Indian drug firm by revenue, tumbled 13% on June 26 after the FDA seized drugs made by its Caraco Pharmaceutical Laboratories unit in Michigan.

The company subsequently withdrew its revenue forecast for the current financial year. Nomura estimates the FDA action could potentially shave at least 10% of its full-year revenue.

Sun Pharma closed Monday down 0.10% at 1244.75 rupees, 5% below its June 25 closing price.

Mohit Mirchandani, vice president and head of equity investments at Taurus Asset Management, said his fund has not sold any of the pharmaceutical stocks in his portfolio as a result of the FDA moves.

The U.S. is the biggest market for India's generic drugs such as sumatriptan succinate, the generic version of the migraine drug Imitrex.

Companies such as Ranbaxy, which was acquired by Japan's Daiichi Sankyo Co. last year, and Dr. Reddy's Laboratories Ltd. now get almost half their revenue from developed markets like the U.S. and European Union.

Some firms have also started selling generic drugs into newer markets like China, Japan, Brazil and Mexico in a bid to spread their revenue sources, a positive step according to industry watchers.

In June, Dr. Reddy's, the second-largest Indian drug firm by revenue, and GlaxoSmithKline PLC signed a partnership to develop and sell selected generic products across emerging markets, excluding India.

Lupin forayed into Japan, the second largest pharmaceutical market in the world after the U.S., by acquiring a majority stake in Kyowa Pharmaceutical Industry Co. in 2007.

However, not everyone is convinced that Indian pharma stocks are without risk.

Prateek Agrawal, head of equity at Bharti AXA Investment Managers, said the current regulatory climate is a deterrent for investors because some companies may face a sales ban like Ranbaxy unless they handle the situation effectively.

In September, the FDA banned Ranbaxy from selling some of its drugs in the U.S. saying it violated manufacturing guidelines at two plants in India.

Ranbaxy, India's biggest drug maker by sales, Friday reported a profit for the April-June quarter after posting losses in the past three sequential quarters, hit by unfavorable currency bets, regulatory problems in the U.S., and weak demand in emerging markets.

The FDA is now reviewing Ranbaxy's corrective action plan for one of the plants which it submitted in May.

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.

Pandemic flu shows need for pharma incentives -WHO

* Health threats such as H1N1 require new drugs, jabs -WHO

* Ideal H1N1 vaccine would include seasonal, other viruses

GENEVA, - Pharmaceutical firms need incentives, including lucrative patents, to keep creating drugs and vaccines against emergent threats such as the H1N1 influenza pandemic, the World Health Organisation's head said on Tuesday.

"Progress in public health depends on innovation. Some of the greatest strides forward for health have followed the development and introduction of new medicines and vaccines," said WHO Director-General Margaret Chan said.

Chan, who last month declared a full pandemic underway from the H1N1 virus, said that patents can help ensure that companies develop medicines to "stay ahead of the development of drug resistance" in diseases like malaria and tuberculosis.

The discovery of isolated H1N1 infections that resist the anti-viral Tamiflu, made by Roche (ROG.VX) and Gilead (GILD.O), and the global scramble to secure flu vaccines have shown the importance of robust research and development, Chan said.

"Innovation is needed to keep pace with the emergence of new diseases, including pandemic influenza caused by the new H1N1 virus," she told a meeting on intellectual property and health, a contentious issue that has divided rich and poor nations.

In the speech, Chan said most drug access problems faced by developing countries could be remedied by tinkering with the existing patent system, which "operates as a stimulus for research and development for new products."

In May, at the WHO's annual assembly, rich and poor nations failed to reach consensus on how they should share virus samples of H1N1 and other flu strains with companies that use the biological material to make vaccines.

Indonesia has been especially vocal against this, arguing that developing countries would not be able to afford patented jabs made from their specimens.

PROBLEMS WITH PATENTS

Chan said those talks on "one of the most difficult, and divisive, issues ever negotiated by WHO" had identified problems with patents but said that the existing intellectual property regime did not need to be fully dismantled in pursuit of equity.

"R&D can indeed be needs-driven as well as profit driven," the former Hong Kong health director said. "International agreements that govern the global trading system can indeed be shaped in ways that favour health needs of the poor."

Chan described the global vaccine making capacity as "finite and woefully inadequate for a world of 6.8 billion people, nearly all of whom are susceptible to infection by this entirely new and highly contagious virus."

While acknowledging that "the lion's share of these limited vaccines will go to wealthy countries," she said the shortfall was "the result of limited global manufacturing capacity. It is not, in essence, a result of intellectual property issues."

The WHO has recommended that health workers, pregnant women and children should get priority access to H1N1 vaccines, and noted that every country worldwide will need them. [ID:nLD54719]

Chan said the ideal H1N1 shot would protect against seasonal strains as well as a range of candidate pandemic viruses.

"This innovation has not come about yet," she said. "This would be the best and most rational insurance policy for increasing supplies and encouraging more equitable access."

Top flu vaccine makers include Sanofi-Aventis (SASY.PA), Novartis (NOVN.VX), Baxter (BAX.N), Schering Plough's (SGP.N) Nobilon, GlaxoSmithKline (GSK.L), Solvay (SOLB.BR) and AstraZeneca's (AZN.L) MedImmune.

Two Major Pharmaceutical Makers Will Donate Swine Flu Vaccines

Pharmaceutical companies around the world are hard at work to develop a vaccine that minimizes or eliminates a person’s chance of getting the H1N1 swine flu now sweeping the globe in pandemic proportion. For some of these drug companies, the expected bottom line is driving the research frenzy but two major players have agreed to donate substantial quantities of their vaccines to the World Health Organization (WHO) for use in the world’s poorest companies. According to the chief executive officer of one of them, “We all have to play our part.”

Chris Viehbacher, CEO for Sanofi-Aventis SA, based in Paris, France, says his company will donate 100 million doses of the flu vaccine as soon as the vaccine reaches the production phase. According to Viehbacher, Sanofi has allocated a 10% output reserve for the WHO. He further states playing its part means more than just getting the vaccines only to countries wealthy enough to pay for them, especially in the midst of pandemic illness.

GlaxoSmithKline PC (GSK) will also donate some of the vaccine it’s developing to the WHO, according to company spokesperson, Stephen Rea. Rea says GSK plans to donate 50 million doses.

These announcements of donated vaccine come on the heels of an announcement made by the Swiss pharmaceutical company, Novartis AG, in which the company said it would not be donating any vaccine. Company spokesperson Eric Althoff said donated vaccines won’t effectively address need during time of pandemic but the company is exploring pricing strategies and other measures to allow ample access.

In response to the Novartis announcement, Sanofi’s Viehbacher agreed that donations aren’t sustainable and can’t be relied upon in the long term but he acknowledged the exceptional situations created during pandemic. Saying pandemics are not on-going events and the company is determined to do what it can to help, Viehbacher said the company’s proposed donations to the WHO will not affect its profit margin. Sanofi is considering a policy of tiered pricing in developing countries where its drug manufacturing facilities are completely committed to H1N1 vaccine production.

In a press briefing last week, WHO director-general, Margaret Chan, called on the world’s wealthiest nations to help ensure the vaccine is accessible in even the poorest nations. The agency declared pandemic on June 11 and urged pharmaceutical companies to begin vaccine production.

There are 35,928 confirmed cases of the H1N1 swine flu in the world today, according to WHO data. Swine flu is now in 76 countries and 163 deaths have been officially attributed to it. Health officials are keeping close watch on the virus as it spreads during the Southern Hemisphere winter season. Flu viruses are usually most active during the coolest months of the year and public health officials are concerned the virus may mutate into a more virulent strain that causes more severe symptoms than the current strain causes.

Glaxo, Dr Reddy to develop emerging market drugs

LONDON -- Pharmaceutical company GlaxoSmithKline PLC said Monday it had reached a deal with Indian drug developer Dr. Reddy's Laboratories Ltd. to develop and market selected products across many emerging markets.

London-based Glaxo did not reveal terms of the deal, which is effective immediately but excludes India.

Under the agreement, Glaxo will gain exclusive access to Dr. Reddy's portfolio and future pipeline of more than 100 branded pharmaceuticals in fast growing therapeutic segments such as cardiovascular, diabetes, oncology, gastroenterology and pain management.

The products will be manufactured by Dr. Reddy's and licensed and supplied by Glaxo in various countries in Africa, the Middle East, Asia Pacific and Latin America.

In some markets, products will be co-marketed by Glaxo and Dr. Reddy's. Revenues will be reported by Glaxo, and shared with Dr. Reddy's, Glaxo said.

"This is another significant step forward in our strategy to grow and diversify GSK's business in emerging markets," said Abbas Hussain, president for emerging markets at GlaxoSmithKline ( GSK - news - people ). "Growth in both population and economic prosperity is leading to increased demand for branded pharmaceuticals."

Glaxo shares closed down 1.7 percent at 1,097 pence ($17.84) on the London Stock Exchange.