Sales/Marketing

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Only 21 of 150 medical schools surveyed by the American Medical Student Association (AMSA) have strong policies (either graded A or B), against the pharmaceutical industry marketing to medical students.

Marketing to doctors has been estimated at $28 billion to $46 billion per year, with additional promotion by the medical. This equates, conservatively, to $35,000 per year in marketing directed at each physician.

Below are the list of medical schools ranked A or B, you can find the full list here.

1. (A) - University of Pittsburgh School of Medicine
2. (A) - Mount Sinai School of Medicine
3. (A) - University of California Davis
4. (A) - University of Pennsylvania
5. (A) - UCLA
6. (A) - UCSF
7. (A) - Uniformed Services University
8. (B) - University of Massachusetts
9. (B) - UC Irvine
10. (B) - University of Michigan
11. (B) - University of Miami (FL)
12. (B) - Boston University
13. (B) - Vanderbilt
14. (B) - Columbia University
15. (B) - University of North Carolina
16. (B) - SUNY Upstate
17. (B) - Texas Southwestern
18. (B) - Florida State University
19. (B) - University of New Mexico
20. (B) - Stanford University
21. (B) - Washington University (St. Louis)

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NanoHorizons announced that it has raised approximately $6.7 million in a second round of funding from Penn Venture Partners, L.P., Life Sciences Greenhouse of Central Pennsylvania, and a bunch of other private investors. Half of the investments have been funded, with the remainder to be funded (subject to attaining certain milestones) within one year.

From their corporate slogan:

NanoHorizons, invents, designs, and manufactures advanced nanoparticles that add permanent, cost-effective, and environmentally friendly antimicrobial and performance-enhancing characteristics to consumer, commercial, and industrial products.

The company is a perfect example of how marketing can change perception. First of all, anything “nano” is pretty hot. Awesomely hot. Kind of like the internet bubble hot. In my dreams (I realize this isn’t how it works and is a wild simplification/exaggeration but humor me), I can see this conversation between an entrepreneur and VC:

Founder: Hey, so we have this company.. interested?
VC: Um… I’m really busy.
Founder: The company is called, “Nano xyz”
VC: We’d be crazy not to fund this! How much do you need?

This herd mentality isn’t new, isn’t going away and probably isn’t a bad thing (who cares if everyone makes money, right?).

I just feel like playing the contrarian today. First, though probably slightly more complicated, let’s agree that soaking various cloths in a silver powder isn’t nanotechnology and isn’t overseen by “experienced nanotechnicians” as stated in the press release.

Secondly, since the company is now marketing its SmartSilver technology to retail clothing manufacturers, maybe we should discuss how silver particles may be unsafe for the masses.

Imagine 200 million socks with this technology being washed every day leading to the silver leeching into our waste or even drinking water. Do we know how this silver will effect the environment or even our bodies?

I’m not against NanoHorizons as a company, in fact, I think the company has a brilliant marketing strategy. They are doing exactly the right things to grow their market in, what I would guess, is a pretty competitive market place (I could be wrong, butI can’t imagine there is a huge barrier to entry in getting your hands on some silver dust).

It will be interesting to see where this market is in 5 years. If NanoHorizons has anything to say about it, I’m sure they’d like everyone covered in a thin silver veneer.

Catchy video. Hat tip to PharmaGossip

Most people are into lists and I am no exception. So, without further ado, here is a list of the top  20 drugs by 2007 sales.

Also, because I’m a nice guy, I’ve published the top 82 compounds with loads of other information that wouldn’t fit in the post (e.g.; 2005 and 2006 sales, CAGR growth rates, 2006 rank, generic name and companies booking sales) here on a larger, non-pharmababble styled page.

I can’t promise all the numbers are flawlessly correct, so you might want to double check them before using them in something of uber-importance. Enjoy.

Enzon Pharmaceuticals, on the reported urging of uber-investor Carl Icahn, will spin off a NewCo along with the majority of the company’s core technology (PEGylation), their entire published preclinical pipeline (i.e.; their RNA antagonist oncology portfolio) and $150m of funding from Enzon. Not a bad way to start a company, right?

Maybe I’m way off here but it seems to me in analyzing this deal that the NewCo gets all the goodies while Enzon is left with a manufacturing plant and a stable of marginal drugs (zero out of four therapies have over $50m a year in revenue). Now, I don’t mean to imply that I think Enzon is a bad company - hell, they’ve managed to make more profit this quarter, than any pharma company I’ve ever worked for - I’m just saying they are selling their future based on the advice of a man notorious for breaking up companies and wringing every last dime out of a shakeup. Just listen to the PR speak from their CEO and tell me if it makes strategic sense:

“By separating these unique businesses into two focused companies, the opportunities for both the specialty pharmaceutical business and the biotechnology business could be substantially enhanced and greater value could be created than under the current structure,” said Jeffrey H. Buchalter, Chairman, President and CEO. “Operating separately will allow each company to benefit from greater strategic and managerial focus and appeal to their own unique shareholders. The separation will enable the two businesses to compete more effectively in their respective markets and optimize their business goals, research initiatives and capital requirements. We look forward to creating this opportunity for the shareholders,” said Mr. Buchalter.

So… 1-x= more than 2, due to focus and appeal from unique shareholders? Interesting. I guess it would be wrong to beg for a quick exit strategy via big pharma acquisition for NewCo in the initial press release. But it doesn’t stop there, the bullshit continues:

“The specialty pharmaceutical business will continue its long-standing track record in providing life saving therapies for patients. The business has strong fundamentals, including stable revenue, cash flow, and strong assets,” said Mr. Buchalter. “Upon completion of the spin-off, Enzon will have the resources to better focus its strategy and compete more effectively in the specialty pharmaceutical market.”

Yes, without all that pesky preclinical discovery and development going on, the company can focus on its stable revenue and cash flow until the patents run out and they have to begin thinking about the future!

I don’t think I’m the only one with this opinion either. Even while releasing earnings for the quarter that showed a 20% increase in revenue over 1Q07 and netting the company a ~$2m profit, the stock was penalized ~8%. Is it a shock to learn I don’t think this is enough of a drop? I don’t generally think shareholders should reward the loss of the future earnings potential of the company and the give away the core company technology. But what do I know?

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In other Enzon related news, I just found this press release about the pay of the CEO:

DellaCamera Capital Master Fund Ltd., a 5.8% stakeholder of Enzon Pharmaceuticals Inc. (ENZN), said Thursday that it’s troubled by the compensation granted Enzon Chairman and Chief Executive Jeffrey Buchalter and calls for the resignation of three directors.

DellaCamera sent a letter to Enzon’s board on Thursday, saying that it’s also reviewing its voting alternatives with respect to the three directors up for election at the company’s May 22 annual meeting of shareholders.

DellaCamera is calling for the resignation of Goran A. Ando, Rolf A. Classon and Victor P. Micati, who are the current members of Enzon’s compensation committee.

So I did a little research and it turns out, Jeff Buchalter made $773,558 base with $1,162,500 in bonuses for a total cash compensation of ~$2m. Add to that the just over $3.1m in equity granted to Jeff and he pulled in a total of ~$5.2m in compensation last year (almost 3X any other executive at the company). It’s good to be the king.

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(photo of Icahn from samlustgarden under a creative commons license)

On a disease sexiness scale from 0-100, chronic idiopathic constipation (CIC) and irritable bowel syndrome (IBS-c) are close to rounding out the bottom of that range however, they remain important medical problems. CIC accounts for roughly 6 million related outpatient visits each year and just over a quarter million hospital admissions with constipation as the primary diagnosis. In addition, an estimated 12 million Americans suffer from IBS-c and many have symptoms for a decade. Since the withdrawal of the 5-HT4 agonist, Zelnorm (tegaserod), by Novartis (NYSE:NVS) in March of last year due to possible heart risks, there has been no approved therapy for IBS-c.

Amitiza (lubiprostone), from Sucampo (NASDAQ:SCMP) and Takeda (holds the US rights), is a chloride channel activator that works in the small bowel and has already been approved by the FDA for CIC and yesterday, was approved for the treatment of IBS-c. The drugs is safe (though does have an adverse event (AE) nausea rate of ~30%), effective and most importantly from a safety standpoint, is not absorbed. It has always puzzled me why its sales have lagged behind expectations (only $48m in ‘06 and $154m in ‘06). I’ve always assumed the reason was the AE nausea combined with a slow marketing ramp up and hoped that it wasn’t that physicians were scared away from prescribing therapies after the Zelnorm fiasco (I generally give physicians more credit than that).

Since Zelnorm was only approved to treat IBS-c, the sales numbers, until now, weren’t directly comparable but I’m interested in seeing the year end increase in sales to tease out the meaning behind the initially poor revenues. In its final year, Zelnorm sold almost $500m and was well on its way of surpassing that mark before being killed and I would expect the numbers for Amitiza in the next few years to be higher than that.

I think Sucampo (which will also received a $50m milestone payment from Takeda) has a winner in Amitiza and so far, the market agrees. SCMP is up 38% (to 16.75) after an hour of trading on the market.

(Photo from Polandeze on Flickr under a Creative Commons license)

For the first time in almost 10 months, and not surprisingly, coming on the heels of the GSK / Sirtris buyout that occurred last week, Elixir Pharmaceuticals has announced that they have been granted a patent for a class of SIRT2 regulators. I came down as pretty negative on the Sirtris deal in this post last week and nothing I’ve read by people presumably smarter than me has changed my mind. I still think it’s a terrible move by GSK but it certainly does teach us a lesson about marketing, sales and the media.

Neither company has illustrated proof of concept with sirtuin regulators in a trial with FDA approved endpoints or even in preclinical models. In that respect, the companies are much more similar that they are different however, in this case, the science wasn’t the deciding factor. So why, you ask, did Sirtris get a buyout at an 84% premium and Elixir have to sign a license agreement with Siena Biotech S.p.A to develop the compounds? Marketing.

I imagine that while Elixir was “wasting time” validating the science behind sirtuins and their compounds, Sirtris was having IPOs, running clinical trials with non-approvable FDA endpoints using a drug (resveratrol), that would never in a million years make it to the clinic and finally, frequently publishing press releases (averaging 5-10 a month in ‘08).

Clearly, Sirtris and the marketing machine won this battle. It is a lesson I won’t soon forget in my nascent pharmaceutical business development career.

(Photo by Dhammza from Flickr under a Creative Commons license)

Introduction

A significant chunk of my job in business development entails competitive intelligence and I’ve found the lack of biotech/pharmaceutical specific guide in this area a bit distressing. In that vein, I’ve tried to compile a guide / list of services and hacks I currently use to keep up on the industry in general and find relevant information for partnering our programs. This list is by no means the only or best way to accomplish these tasks… just the way I currently use them. Suggestions?

$$ Databases

With the convenience comes a price. I have no idea how much we pay per seat for any of these and I’m sure I’d be appalled to know so I’ll stay blissfully ignorant. Essentially, 95% of the information contained in these databases is publicly available and you pay for ease, time-savings, context and linkability.

- ThomsonPharma/Integrity: I consider these (Thomson recently purchased Integrity) to be the 800lb gorilla of hyperlinked pharmaceutical information. The lag time from company press release or presentation of data, to inclusion of data is decent (sometimes a day or two, other times it can take a month). The real value though, is in the manipulation of information, automatic updates and the degree of connectivity they display. With a few clicks, you can find related patents, proposed chemical structures and sales number for all compounds for an indication or mechanism of action. While they lack true natural language searching they are loaded with nice, but mostly superfluous visual effects and contain the ability to create mostly useless charts on the fly.

- Recombinant Capital: Database of biopharma alliance information. Quite useful for deal information, contract language and tracking the flow of cash for financing rounds and milestone payments.

- Datamonitor: Need a 180 page report on fragile X syndrome with 8 year market projections?… this is your site. Their numbers projections shouldn’t be taken as the gospel and sometimes the reports aren’t updated as quickly as I’d like, but as for finding a critical mass of statistical information about a topic including a market summary, SWOT analysis, disease briefing and pipeline review, a Datamonitor report can’t be beat.

Publicly Available Sources

Google Searching
In the internet age, where everything can be found through Google, it pays to know how to search and how to refine your searches by using operaors to find that needle in a haystack. You can find a two page cheat sheet here but I can’t resist showing the few that I use with regularity:
- [herbs -basil]: all pages with the word “herbs” but not “basil.” Helpful for reducing the number of results
- [searchtermshere site:www.yourwebsitehere.com]: Searches only the website you chose for relevant information.
- [searchtermshere filetype:pdf]: good for finding pfds, word, ppt files associated with a company or drug of interest. Really useful when using with “site:” trick above.

I’m an engineer by training, which means I’m pretty lazy and I’d never do something repetitively that I can get a computer to do for me. In this vein, let me tell you about Google Alerts. Google allows you to save searches that it will then run automagically and send an update should anything change. If nothing changes, you don’t get an email. It is that simple and simply fantastic. Want to know whenever FTY720 is in the news? Set up an alert to email you. You have to be kind of clever about how you word your searches (great opportunity to use the techniques above) so that you don’t get overwhelmed with emails but if you do it correctly, the signal to noise ratio should be acceptable.

Clinical Trial Information
Looking for clinical trial information? Clinicaltrials.gov, WHO trial search or Centerwatch should do the trick.

Currently Approved Drug Information
- To find drug pricing information I use: Drugstore or RegenceRx
- Patent expiry information: The Orange Book
- Patent searching: USPTO, WIPO
- FDA/Regulatory approval docs (literally thousands of pages of potentially useful information): Drugs@FDA

Company Research
- To track company filings in an automated fashion I use SECInfo.com and subscribe the the filings of companies I am interested in. Every time they file a doc with the SEC, it gets dropped into my inbox. Signal to noise is pretty low but occasionally I’ll get lucky by spotting an updated S1-A, tracking an IPO or even just tracking latest earnings results. This service also lets you search the EDGAR database so instead of heading to the SEC site, I usually just go here.

I wonder how much they paid for this marketing advice. It sounds like a golf course management company.