Source: Mnolf http://bit.ly/gEg5yo
In our November 11, 2010 blog post, we discussed the September 2010 acquisition of Seattle biotech firm ZymoGenetics by Bristol-Myers Squibb (BMS). Also in November 2010, Nature Biotechnology published an article about this acquisition, in which I was quoted.
As our blog post states, most commentators believe that BMS’ main motivation for acquiring ZymoGenetics was to gain full ownership of ZymoGenetics’ pegylated interferon-lambda (Peg-IFN-λ) program for treatment of hepatitis C (HepC). The two companies had been been collaborating to develop Peg-IFN-λ since January 2009. However, ZymoGenetics was much more than a one-product company. Its other pipeline drugs included interleukin-21 (denenicokin) for treatment of metastatic melanoma, which is now in Phase 2b development. And over the years, ZymoGenetics has proven to be an important drug discovery engine, from the days in which it was a division of Novo Nordisk, and continuing on into 2010.
Now–as of the first week of January 2011–we learn that former ZymoGenetics CEO Douglas E. Williams Ph.D. has been named as Executive Vice President, R&D., at Biogen Idec (Weston, MA).
Dr. Williams has over 20 years of biotech R&D and senior leadership experience. He was the chief technology officer at Seattle biotech firm Immunex, and played a significant role in the discovery and development of the blockbuster tumor necrosis factor (TNF) inhibitor etanercept (Enbrel). After Amgen’s 2002 acquisition of Immunex, Dr. Williams resigned from Amgen later in 2002, and moved on to Seattle Genetics in 2003 as chief scientific officer (CSO). In 2004, he joined ZymoGenetics as chief scientific officer (CSO). On January 1, 2009, he became ZymoGenetics’ CEO.
During his tenure as CSO and then CEO of ZymoGenetics, the company achieved considerable success in the development of its pipeline products, especially Peg-IFN-λ and interleukin-21. And the company entered into its $1.1 billion agreement with BMS to codevelop Peg-IFN-λ. However, during Dr. Williams’ tenure as CEO, ZymoGenetics had some financial rough spots, mainly caused by the lack of commercial success of the company’s first self-marketed product, recombinant thrombin (Recothrom). This was compounded by failed clinical trials of the company’s immunomodulatory drug atacicept, which is now being developed by Merck Serono. After a series of downsizing moves, ZymoGenetics agreed to be acquired by BMS in October 2010. In November 2010, Dr. Williams left ZymoGenetics and became a “free agent”, followed by his joining Biogen Idec in January 2011.
Biogen Idec, which was founded as Biogen in 1978 and merged to form Biogen Idec in 2003, is one of the world’s major biotech companies, and has long been a major fixture of the Boston-Cambridge biotech scene. The company had 2009 revenue of $4.38 billion. However, Biogen Idec had some ups and downs of its own in recent years. It has been targeted for reorganization, breakup, or sale by activist investor Carl Icahn, who currently owns 5.4% of the company’s shares, and who controls three seats on Biogen Idec’s board as the result of series of proxy fights.
During 2010, long-time CEO (and Icahn target) James Mullen retired from the company, and was succeeded by former Exelixis (South San Francisco, CA) CEO George Scangos, Ph.D. In January 2011, at the same time as Dr. Williams joined Biogen Idec, the company announced that Steven H Holtzman (who was formerly the CEO of Cambridge MA biotech Infinity Pharmaceuticals) would be executive vice president of corporate development.
Biogen Idec derives most of its revenues from three drugs–multiple sclerosis (MS) treatments Avonex (interferon beta-1a) and Tysabri (natalizumab), and Rituxan (rituximab), a treatment for non-Hodgkin’s lymphoma. Tysabri is also approved for treatment of Crohn’s disease and is co-marketed with Élan, and Rituxan is also approved for rheumatoid arthritis and is co-marketed with Roche/Genentech.
Among these products, Avonex (which was introduced in 1996, and is Biogen Idec’s largest selling drug) and Rituxan are maturing. In particular, Avonex faces increased competition from newer products. Growth in sales and revenues from these two products is slowing.
Tysabri is intended to be Biogen Idec’s growth driver. However, Tysabri has had major issues. Soon after its launch in 2004, Biogen Idec withdrew Tysabri from the market, after it was linked with three cases of the rare neurological condition progressive multifocal leukoencephalopathy (PML), when co-administered with Avonex. PML is caused by the JC virus, which is normally controlled by he immune system, but which can rarely cause disease in patients under immunosuppresive therapies such as the Tisabri/Avonex combination. After a safety review and no further deaths, the drug was returned to the US market in 2006 under a special prescription program, in part as the result of pleas by MS patients. However, since then additional cases of PML–including fatalities–have occurred.
In December 2010, Biogen Idec and Elan submitted a supplemental Biologics License Application (sBLA) to the FDA and a Type II Variation to the European Medicines Agency (EMA), proposing updated product labeling to include anti-JC virus antibody status. The companies propose using this test to help stratify the risk of developing PML in patients treated with Tysabri. Biogen Idec expects that a commercial anti-JC virus antibody test will be available later in 2011. It is expected that this test will help to lower the risk of Tysabri-associated PML, which is low to begin with.
In addition, Tysabri faces potential strong competition from the first approved oral treatment for MS, fingolimod (Novartis’ Gilenya), which the FDA approved in September 2010. The day that Gilenya was approved, Biogen Idec issued a press release acknowledging the desire of MS patients for an oral treatment, and noting that it also has an oral MS treatment in Phase 3 trials, BG-12.
Biogen Idec estimated that as of the end of 2010, approximately 56,600 MS patients were using Tysabri worldwide. That represented an increase of 1,700 patients in the fourth quarter and 8,200 patients over the course of 2010.
In November 2010, Dr. Scangos announced a reorganization of Biogen Idec. As of that date, the company would focus on neurology, and leverage its strengths in biologics research and development (R&D) and manufacturing to pursue select, high-impact biologic therapies and to be a leading collaborator in the biotechnology industry. (Biogen Idec’s efforts in biologics might, for example, include entering the biosimilars market.) Biogen Idec also terminated its efforts in cardiovascular medicine, and is seeking to spin out or outlicense its oncology programs.
The restructuring also involved consolidating its sites, and reducing its work force by 13%, or 650 full-time positions. As a result of the restructuring, the company expected to save approximately $300 million annually. Dr. Scangos said that the restructuring would enable Biogen Idec to gain focus and to become more nimble.
The company intends to become a global leader in neurological diseases. This will involve not only maximizing the potential of its two marketed MS drugs, but also bringing forward its MS pipeline products. Biogen Idec will also pursue programs in amyotrophic lateral sclerosis (ALS)/Lou Gehrig’s disease and Parkinson’s disease.
Biogen Idec’s late-stage products in neurology are shown in the table. (Please click on the table to read it clearly.) The company intends to launch five new products by 2015.
Source: Haberman Associates
Although Biogen Idec now has several late-stage products moving toward commercialization, the company’s R&D productivity has lagged in recent years. The company has not launched a new drug since Tysabri was approved in 2004. Dr. Williams says that he is planning a review of he company’s R&D organization and its pipeline. He intends especially to focus on Biogen Idec’s early- and mid-stage programs. Dr. Williams intends to boost these programs both via internal R&D and via licensing and acquisition to bring in externally developed compounds.
Overall, Dr. Williams hopes to return Biogen Idec to the culture of a biotech start-up. “We don’t have the luxury of sitting back. We have to push hard like we are a scrappy, hungry, cash-starved biotech,” he says. Dr. Williams’ statement is in accord with that of Dr. Scangos, who speaking at the J.P. Morgan 29th Annual Healthcare Conference in January 2011, said that Biogen Idec had the choice of being either a small pharma or a big biotech. The company has chosen to be a big biotech.
We wish Dr. Williams–working together with George Scangos and Steven Holtzman–well as they work to return Biogen Idec to productive and innovative R&D.
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