Sanofi, Merck's Gardasil To Launch Europe Oct-Nov

After receiving a positive opinion from E.U. regulators, breakthrough cervical cancer vaccine Gardasil could be available in a number of European countries in late October or early November, Sanofi Pasteur MSD President Didier Hoch said Friday.

Gardasil, which was approved in the U.S. in June, was developed by Sanofi Pasteur MSD, a joint venture between French drugmaker Sanofi-Aventis SA (SNY) and Merck & Co Inc (MRK) of the U.S.

The European launch would follow a final approval for the product from the European Commission, which is expected in early October, Hoch said.

If eventually approved by the European Commission, which usually follows the recommendations of the European regulator's advisory panel, Gardasil would be the first cervical cancer vaccine on the market, ahead of competitor GlaxoSmithKline PLC's (GSK) Cervarix, which is still awaiting approval.

"We plan to first launch in the U.K., Germany and Austria, then Nordic countries, like Denmark and Sweden, and the Netherlands," Hoch said.

The positive opinion came two or three months ahead of expectations, or about seven months after Gardasil's dossier was filed with the E.U. in December 2005, Hoch said.

Earlier Friday, the European Medicines Agency's advisory panel recommended Gardasil for the prevention of cancer, precancerous lesions and genital warts caused by four strains of the human papillomavirus, or HPV, which is the leading cause of cervical cancer.

A three-dose course of Gardasil is expected to cost EUR300, Hoch said.

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Pfizer's New Chief Faces Challenges

In naming Jeffrey B. Kindler as chief executive officer, Pfizer Inc.'s directors are bringing a fresh face to the helm of the pharmaceutical giant, but one whose skills to fix Pfizer's problems are little known outside the company.

As chief executive, Mr. Kindler, who had been a vice chairman and general counsel, faces several urgent challenges, from emerging questions about the company's highly anticipated new cholesterol medicine, torcetrapib, to relations with the investment community, where some have become disenchanted with Pfizer's top leadership. He comes to the top job having limited operational experience and only four years in the pharmaceutical industry after joining Pfizer in 2002.
Mr. Kindler, 51 years old, was selected Friday, capping a highly visible 18-month contest for the CEO spot with two internal rivals. He succeeds Henry A. "Hank" McKinnell, who was forced to relinquish his CEO duties 18 months ahead of schedule. Mr. McKinnell is to remain chairman until February.
The New York company declined to make Mr. Kindler available for interviews over the weekend, saying he has a "very full agenda over the coming days," reaching out to employees, investors, corporate partners and other constituencies. Mr. McKinnell also was unavailable to comment.

In a statement issued late Friday announcing his appointment, Mr. Kindler, a former executive at McDonald's Corp. and a vice president at General Electric Co., pledged to "transform virtually every aspect of how we do business." Without providing details, he said he would aim to make the company more efficient and cost-effective.

Mr. Kindler's appointment "was a surprise," said Mike Krensavage, drug-industry analyst at Raymond James & Associates. "I'm not sure what to expect from him."
Matthew Paull, chief financial officer at McDonald's, worked with Mr. Kindler for about five years when Mr. Kindler was general counsel at the fast-food giant. "He was much more than a lawyer," Mr. Paull recalled. "He was very strong on strategy." Soon after he arrived, Mr. Kindler wrote a "lengthy white paper" urging that more company resources belonged away from headquarters and closer to the customer, Mr. Paull said. "It was exactly the right thing to do." The company adopted the idea.

Mr. Kindler also engineered McDonald's acquisition of the Boston Market restaurant franchise, then in Chapter 11 bankruptcy proceedings. The intent was to acquire real-estate sites for more McDonald's restaurants, but Mr. Kindler convinced the company that the Boston Market restaurants could still be a good business, said Mr. Paull, whom Pfizer helped make available for an interview. Mr. Kindler eventually became CEO of the business unit that ran the operations, restoring them to profitability.

Mr. Kindler takes Pfizer's reins in the face of patent expirations affecting some of its top-selling drugs and uncertainty over how well new medicines in its research and development pipeline will pick up the slack. In particular, Lipitor, its $12.1 billion cholesterol drug, is under pressure from generic versions of another statin as well as branded rivals such as AstraZeneca PLC's Crestor, while the antidepressant Zoloft just went off patent. (more about drug pipeline by pfizer and competitors at http://www.chartsbank.com/PipelineList.aspx )

Pfizer's best chance to return to a growth track is torcetrapib, an experimental drug that raises HDL, or good cholesterol, that some analysts think could eventually eclipse Lipitor in sales. The first major indication of the drug's prospects is expected to come with results of an important study in next year's first quarter.

But some excitement about the drug is muted by worries that it causes small increases in blood pressure. In addition, the impending trial is based on imaging to see whether the drug halts or regresses development of disease in coronary arteries. The Food and Drug Administration, especially in the presence of the blood-pressure concern, may want to see whether the drug prevents heart attacks and cardiovascular deaths, analysts say. That could push approval off at least until 2010. Pfizer says it believes any increase in blood pressure can be "easily monitored and managed clinically."
"Torcetrapib is the biggest bet in the pharmaceutical industry," Mr. Krensavage said.

Richard Evans, an analyst at Sanford C. Bernstein, said Pfizer has a similar compound that may skirt the blood-pressure problem, suggesting that one challenge facing Mr. Kindler is whether to ramp up development efforts on that agent in case the course with torcetrapib goes awry.

Another issue is the future of Karen Katen, 57, and David Shedlarz, 58, both vice chairmen and longtime Pfizer executives who were CEO candidates. Ms. Katen, heads the human health division, the company's most important unit and is long on operational experience where Mr. Kindler is thin. Mr. Shedlarz, a former chief financial officer, is well known on Wall Street where he is viewed as the architect of the company's financial strategy. The company hasn't indicated what their status will be under Mr. Kindler.

Stan Ikenberry, the company's lead director, said Mr. Kindler's experience outside of Pfizer was a factor that gave him an edge over other candidates. The board also views him as a "bright, insightful strategic thinker" and a "strong leader, a person who motivates and inspires colleagues."

Glaxo Announces Breakthrough On Bird-Flu Vaccine

GlaxoSmithKline PLC said it has produced an effective bird-flu vaccine for humans and could begin producing the shots at year's end, leaving it to governments to decide whether to begin ordering the shots.

Glaxo, the world's second-biggest drug maker by sales behind Pfizer Inc., called the findings a breakthrough but said it needs to gather additional data before it can answer several important questions, including how much of the vaccine it will be able to manufacture.

In a clinical trial of 400 people, two doses of Glaxo's vaccine produced a strong immune response against the H5N1 virus in more than 80% of people who received it. Significantly, the vaccine achieved this response with a relatively low level of active ingredient, or antigen, which could help Glaxo produce more shots to cover more of the world's population. Other companies developing H5N1 vaccines have reported less-promising results in tests. (most recent pharmaceutical pipeline changes at http://www.chartsbank.com/PipelineList.aspx )

Global health officials worry the H5N1 virus could eventually mutate into a strain that would pass easily from person to person, which could spark a pandemic. Glaxo believes its vaccine would give people some protection against some mutations of H5N1, but it won't know how much until it conducts further tests.

Some governments, including the U.S., have considered inoculating their populations with an H5N1 vaccine before a pandemic hits, on the assumption that the shot would provide some level of protection against a pandemic strain. This would help buy time until a vaccine matching the pandemic strain could be produced.

In a telephone interview, Glaxo Chief Executive Jean-Pierre Garnier said the company is beginning to speak with governments about this kind of prepandemic use of Glaxo's vaccine. "Several governments want us to present the data -- they are very keen to find out what we have," he said.

Glaxo said it expects to submit the vaccine for regulatory approval in coming months. In the U.S., the Food and Drug Administration has pledged a speedy review process for pandemic-flu vaccines.

Glaxo announced its bird-flu findings as it reported a 14% rise in second-quarter net profit to GBP 1.32 billion ($2.43 billion) from GBP 1.16 billion a year earlier. Sales rose 11% to GBP 5.81 billion from GBP 5.25 billion. Glaxo raised its full-year earnings outlook, saying earnings per share would rise by about 12% instead of 10%. Some analysts said they had expected a bigger upgrade. Glaxo shares ended down 1.5% at GBP 15.07 in London.

Deutsche Bank AG estimated in a research note that the H5N1 vaccine could potentially bring in annual sales of $2 billion for Glaxo.

Glaxo uses an inactivated strain of the H5N1 virus to make the shots. It has made the vaccine in small batches but is uncertain how much of the inactivated virus will be needed to make the shots in industrial quantities. Glaxo also is uncertain of demand.

A company spokesman said Glaxo likely would charge GBP 4 to GBP 7 a shot, or about what it charges for a seasonal-flu shot. Mr. Garnier said Glaxo plans to speak with the Bill and Melinda Gates Foundation and other charitable organizations about providing funds to buy shots for poorer countries. The H5N1 virus so far has killed more than 130 people world-wide.

Two doses of Glaxo's vaccine, each containing 3.8 micrograms of antigen, achieved the 80% protection rate. By contrast, Sanofi-Aventis SA earlier this year said two doses of its vaccine, each containing 7.5 micrograms of antigen, achieved a 40% protection rate.

Pfizer Inc. directors named Jeffrey B. Kindler, the company's general counsel and a former McDonald's Corp. executive, as CEO, succeeding McKinnell

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Pfizer Inc. directors named Jeffrey B. Kindler, the company's general counsel and a former McDonald's Corp. executive, as chief executive, succeeding Henry "Hank" McKinnell at the helm of the world's largest pharmaceutical company. Mr. McKinnell will serve as chairman until he retires in February 2007, a year ahead of his planned retirement.

Mr. Kindler, who joined Pfizer in 2002, will be charged with returning luster and growth to the struggling company, which moved to dominance in the pharmaceutical industry in the 1990s when it became one of the world's most successful major corporations.

Mr. Kindler, 51 years old, beat out two other internal candidates for the top job: Karen Katen, 57, head of the company's human-health group, and David Shedlarz, 58, head of finance. All three were appointed vice chairmen and joined Mr. McKinnell in a four-person executive committee 18 months ago, a move that set up an intensely watched horse race for the corner office.

Earlier this year, the board had indicated it was satisfied with Mr. McKinnell's leadership and expressed confidence that the company would work its way through one of its worst periods in recent memory. But Pfizer's languishing stock price and internal strife resulting from the CEO contest were among factors that prompted the board to take action, according to several people familiar with the action. There also was controversy over Mr. McKinnell's compensation.

Mr. Kindler said in a statement it is a "privilege to assume responsibility" for leading Pfizer. Noting that the drug business is "undergoing unprecedented change, he said, "We will transform virtually every aspect of how we do business, focusing on actions that create and sustain value for our shareholders." Mr. Kindler was also elected to the board.

Mr. Kindler clerked for U.S. Supreme Court Justice William J. Brennan Jr., was a partner and litigator at Williams & Connolly and later took an in-house role as leader of litigation and legal policy at General Electric Co. In 1995, he jumped to fast-food giant McDonald's to become its general counsel. He later relinquished the legal reins there to become Chairman and CEO of Boston Market Corp., owned by McDonald's, and president of Partner Brands, also owned by McDonald's.

While at McDonald's, he was required to work in a McDonald's like other employees. "Of all my experiences in life, the most frightening thing I've ever had to deal with was to stand behind the counter of a McDonald's and see three school buses pull up," he said in an interview with The Wall Street Journal earlier this year.

He joined Pfizer as general counsel in 2002.

At most drug makers, legal battles have intensified in recent years over product liability and patents. On these issues, Mr. Kindler has been the architect of Pfizer's strategy, including the successful defense of patents for the blockbuster cholesterol drug Lipitor in the U.S. and United Kingdom.

For the task of reigniting Pfizer's growth, Mr. Kindler will have enormous resources: The company has a hoard of cash and has already announced plans to spend $17 billion on acquisitions and as much as another $17 billion on stock buybacks over 18 months.

But he will face daunting challenges -- including growing competitive pressure on Lipitor, its biggest seller -- and a fast-changing marketplace where both new science and pricing pressures are challenging the business model on which both Pfizer and its brethren had thrived until recently.

Moreover, the company's return to a growth track may depend heavily on something over which the new CEO will have little control: the fate of its experimental drug torcetrapib against cardiovascular disease. Some analysts believe the drug has a chance to eventually eclipse Lipitor in sales. Strongly positive studies could lead to approval in 2008, analysts say. But even a modest stumble could delay its coming to market until 2010 or 2011, they add, substantially prolonging current profit woes. Competitors loom as well.

Pfizer directors began their all-day huddle early Friday morning at the midtown offices of Cadwalader, Wickersham & Taft, one of the company's outside law firms. Though it wasn't a regularly scheduled meeting, the special board session had been arranged a month ago, one person close to the situation said late Friday.

"Nobody knew coming into the meeting today that [directors] would reach consensus on a candidate" nor reach consensus on the timing of Mr. McKinnell's departure, the informed individual said. Board members hadn't previously discussed the possibility of moving up his departure date, but directors quickly reached agreement, the person added. "There were no extended arguments."

Some directors favored Ms. Katen because she has more operational experience than Mr. Kindler, according to this individual. Other directors were eager for a decision because they had become increasingly perturbed by the protracted horse race launched in February 2005.

"Once you start the [succession] process, it gridlocks the organization," a knowledgeable person said. "You want to make it done as fast as possible. The only thing worse than that is making the wrong decision."

Pfizer named Mr. McKinnell as successor to CEO William Steere in January 2001. Mr. Steere remains a Pfizer board member and is also a board member of Dow Jones & Co., publisher of The Wall Street Journal.

The stock of Pfizer began 2001 at $41.19 and Friday was at $26.11 in 4 p.m. New York Stock Exchange composite trading, a decline of nearly 37%. Growth in net income at the company has slowed; Pfizer earned $7.79 billion in 2001 and $8.09 billion last year.

Cancer Drug Gleevec Is Shown To Carry Heart Risk

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A small but significant study of the cancer-drug Gleevec shows the drug can be toxic to the heart and can lead to heart failure in some patients, raising a possible stumbling block for a treatment that is remarkably successful at treating leukemia.

Researchers who carried out the study, which was published yesterday by the scientific journal Nature Medicine, recommend patients taking Gleevec be monitored for heart-failure symptoms and that other similar drugs in development be tested in early stage trials for evidence of heart toxicity. If further tests confirm that Gleevec can indeed cause heart problems, it will be a setback for the drug and possibly for other targeted therapies, which are designed to attack only cancerous cells while avoiding tissue damage in the rest of the body.

Unlike chemotherapy, "the idea was that [targeted therapies] would limit collateral damage, when in fact we're finding that other tissues can be affected by this model," Jean-Bernard Durand, a cardiologist at M.D. Anderson Cancer Center in Houston and one of the authors of the Nature Medicine paper, said in an interview.

Herceptin, a targeted and highly effective treatment for breast cancer, has also been linked to heart troubles in some patients, though that risk doesn't appear to have slowed the drug's use.

In a statement, Novartis AG, the maker of Gleevec, said clinical trials and other studies of Gleevec have shown that the incidence of heart failure is "extremely rare." Novartis declined to provide a figure. The company said further investigation would be necessary to understand the possible effect of Nature Medicine's study of Gleevec.

Dr. Durand said some patients with heart failure improved and were able to continue taking Gleevec when they were also given heart medication. About 100,000 patients world-wide take the drug.

The researchers writing in Nature Medicine examined 10 patients who developed severe congestive heart failure while taking Gleevec. They also studied the drug's effects in mice and in cultured cells. Because the study was small and not a controlled clinical trial, the researchers said they had no way of knowing what percentage of Gleevec patients might develop heart troubles.

The scientists recommended a more rigorous trial be carried out to gauge the magnitude of the cardiovascular risk. Thomas Force, a cardiologist at Jefferson Medical College in Philadelphia and another of the authors of the Nature Medicine article, said he didn't believe heart troubles would affect a large percentage of Gleevec patients.

Gleevec has proved highly successful at treating chronic myelogenous leukemia, or CML, and a rare stomach cancer known as GIST. A recent study that followed CML patients treated with Gleevec showed that 89% were still alive after five years, a survival rate that cancer specialists deem remarkable.

Michael Deininger, an oncologist at Oregon Health & Science University in Portland, said he believed the new study would prompt closer monitoring of Gleevec patients for heart troubles. But he said Gleevec's benefits still far outweigh its risks.

George Demetri, an oncologist at Dana-Farber Cancer Institute in Boston, agreed. "The fact that we're dealing with lethal cancers allows for some tolerance of side effects," he said.

FDA Clears HIV-Drug-Combination Pill

The Food and Drug Administration approved a drug to treat HIV infection that combines three widely used antiretroviral medications into one pill.

Bristol-Myers Squibb Co. and Gilead Sciences Inc. will sell the drug in the U.S. under the brand name Atripla. Merck & Co. will be involved in marketing the drug in countries outside the U.S.

Atripla is a tablet that would be taken once daily by adults with HIV infection, the virus that causes AIDS. The drug could be combined with other HIV/AIDS therapies, the FDA said. It was approved in less than three months as part of an agency program to more quickly bring life-saving medicines to the market.

The drug combines Bristol's Sustiva with Gilead's Emtriva and Viread. Merck holds the marketing rights to Sustiva outside the U.S., which it sells under the name Stocrin. The collaboration among the three companies is the first of its kind in the HIV/AIDS field.

The new combination drug -- which may be available starting next week -- would simplify treatment for HIV/AIDS by cutting down the number of medications patients must remember to take. It also has the potential to cut down on the emergence of drug-resistant HIV strains that develop more rapidly when patients forget to take some doses of their drugs

"This offers a particularly important advantage for patients in many countries that are most affected by the AIDS epidemic and will also have a major impact in the U.S.," said Andrew von Eschenbach, the acting FDA commissioner.

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Biopure Moves To Sell Blood Substitute In Europe

Biopure Corp. wants to market its blood substitute in Europe for orthopedic surgery, though its own study of orthopedic-surgery patients linked the product to high rates of hypertension, serious cardiac events and fluid in the lungs.

The Cambridge, Mass., company said it initially is seeking marketing approval in the United Kingdom and if it gains approval, it "may seek" marketing authorization throughout Europe. Biopure said it bases its application in the U.K. on "new analyses of existing data" from its 688-patient orthopedic-surgery trial and a 160-patient general surgery study, as well as on studies of the blood substitute in animals. The company said it has built a database involving 1,500 patients, of whom more than 800 received the blood substitute, called Hemopure.

Food and Drug Administration documents made available to The Wall Street Journal show that, in orthopedic and general-surgery studies conducted by Biopure, patients on the blood substitute experienced a higher rate of strokes and mini-strokes than did patients getting donor blood. The records also show the FDA itself found "numerous imbalances" in which blood-substitute patients had more "adverse events" occurring to them than did people who got donor blood.

Biopure says its product is safe and that it disputes some of the FDA's calculations of side effects in Biopure research. However, Biopure officials have said in recent interviews that a published medical abstract on the research, from the UCLA School of Medicine and elsewhere, is accurate. This short paper showed, among other things, that people in the Hemopure group had more cardiac "serious adverse events" than did patients getting donor blood (6% versus 2%).

Also, in a draft written response to the FDA made available to this newspaper, Biopure acknowledged the Hemopure patients in the orthopedic-surgery study had more cases of hypertension, fluid in the lungs, and cardiac arrest or heart failure than did patients getting donor blood.

William Hoffman, who was medical director of Biopure during the study, said he came to the conclusion from the study that Hemopure was "harmful."

"There are no human data, in my opinion, that support the use of Hemopure or any blood substitute as a safe alternative to red blood cells in elective surgery," said Dr. Hoffman, now director of cardiac-surgery critical care at Massachusetts General Hospital.

The FDA has scheduled an advisory-committee meeting Friday on a U.S. Navy proposal to test Biopure's blood substitute in U.S. civilian trauma patients. The FDA said it plans to bar the public and media from the meeting, citing "trade secret" information. Biopure officials have said there are no trade secrets preventing an open hearing. The Navy didn't respond to a request for comment.

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Europe's Midsize Drug Firms Struggle To Survive

Europe's family-owned drug companies are fast becoming an endangered species, struggling to survive in an increasingly challenging regulatory and competitive environment by raising money in capital markets and taking strategic steps to fend off suitors.

Mostly midsize, these family-owned firms often have attractive pipelines of potential drugs in development but lack the size and flexibility to support the huge costs -- about $1 billion per drug -- to fully develop them and bring them to market.

The companies also lack the funds to expand into more-lucrative markets that can cushion losses when European authorities clamp down on prices. For example, France's senior-health-advisory body, la Haute Autorite de sante, recommended this past fall that the state stop reimbursing patients for 221 drugs to cut health spending. Currently the state reimburses patients for 35% of the medicine's cost. In Britain, the National Institute for Clinical Excellence for a time declined to allow the taxpayer-funded National Health Service to pay for Roche Holding AG's Herceptin to treat women with early-stage breast cancer. After multiple requests, NICE in June proposed that NHS use it for both early- and late-stage cancers.

"Big European family-owned companies can stay strong, viable and independent as long as they want," said Lehman Brothers Vice Chairman Frederick Frank, who specializes in pharmaceuticals and health care. "But the midsize ones like Pierre Fabre in France will find it harder and harder to survive unless they become more enterprising."

The plight of these companies underscores the difficulties facing many closely held companies throughout the region, though the situation is particularly challenging for the pharmaceutical industry. Consolidation is rife as big drug companies seek to bulk up through acquisitions and private-equity companies seek investment targets.

Like many of Europe's family-owned businesses, the pharmaceutical companies have expanded beyond their borders as their market becomes more international. But expansion into U.S. and Japanese markets is particularly vexing for family-owned European drug firms because the costs of development are so high and the process so fraught: Nine of 10 new drug candidates fail in clinical studies because the preliminary laboratory and animal tests don't accurately predict safety and effectiveness, according to the U.S. Food and Drug Administration. If a drug fails, companies often struggle to find capital to start anew.

Merck KGaA is one of the larger European midsize family companies, with 5.9 billion euros ($7.5 billion) in sales in 2005. But its recent experience underscores the troubles of the peer group. After spending 100 million euros to 200 million euros developing Sarizotan, a drug for Parkinson's disease, the company suspended research in the final stage of clinical testing because the product didn't show a statistically significant improvement over a placebo. The decision leaves Merck's pipeline for nononcology drugs nearly empty, according to analysts.

Merck KGaA, which isn't related to U.S. company Merck & Co., already was reeling from an aborted effort to buy Schering AG for 77 euros a share. A subsidiary of rival Bayer AG offered 86 euros a share, snatching the deal from Merck KGaA's fingertips.

Under such competitive and regulatory pressure, many companies say they must grow to remain independent, and some are tiptoeing into the public markets to boost cash flow.

In May, Spain's Grifols SA listed almost 50% of its shares on the Spanish stock exchange, raising 312 million euros. The company is the world's fourth-biggest maker of blood plasma, behind Australia's CSL Ltd., U.S.-based Baxter International Inc. and Germany's Bayer. The Grifols family, which founded the company 66 years ago, remained the largest shareholder, retaining a 36.1% stake. The shares have risen 46% since the IPO to 6.44 euros.

"The main reason [for the listing] is for the company to be able to compete with other companies outside the Spanish market," Chairman Victor Grifols said on the day of the listing.

In 2005, Ipsen, France's fourth-largest drug company by revenue, after Sanofi-Aventis SA, Servier Laboratories and Pierre Fabre SA, faced price reductions by health authorities in European countries that sliced sales growth by 1.1 percentage points. In response, the Beaufour family decided to list almost 19% of the company's shares on the Paris exchange in December. The IPO raised 349 million euros for external growth, notably in North America. Ipsen shares have risen 49% from their 22.20 euros listing price.

Pierre Fabre, France's third-largest drug maker by revenue, with sales of 1.49 billion euros last year, is considering different strategies for raising funds to expand. A partial IPO also could ease uncertainty about a successor to 80-year old chairman and founder Pierre Fabre, who has no direct heir. The company, which had 1.5 billion euros in sales in 2004, already has taken steps to transfer some stock to friendly hands by creating an employee-shareholding scheme that allows workers to acquire a maximum of 10% of the capital.

"The company and its chairman don't rule out an initial public offering, but we would only be looking to list a minority stake of the capital," Pierre Fabre Chief Financial Officer Bertrand Parmentier said.

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Pfizer Drug Shows Promise Helping Smokers Quit

SMOKERS GET HOOKED by more than nicotine. If they light up 20 times a day, they're in the habit of taking 200 or more puffs daily, often timed to pleasurable things like coffee, alcohol, food or sex. So the chances of smokers quitting on their own are estimated at as low as 1% to 7%.

Thus, there has been considerable buzz among smoking-cessation doctors about a new Pfizer Inc. drug called varenicline, which the company plans to market this month under the brand name Chantix. Research published this week shows the drug appears to increase significantly the numbers of people who are able to give up smoking -- even compared with patients using current drug therapy to help.

Despite the positive findings, there were several limitations to the research. One is the fact that people with pre-existing conditions such as depression, alcohol or drug abuse, and diabetes requiring insulin were excluded from some of the studies. Another stems from the fact that the majority of authors of the three studies, which were published in the Journal of the American Medical Association, either have done consulting work or received honoraria or research grants from Pfizer and other drug companies, or are Pfizer employees or shareholders.

Such apparent conflicts of interest won't normally change the major findings of research. But they can affect nuances and shadings of the way they're presented. "All of these papers were rigorously peer-reviewed," says the University of Wisconsin's Douglas E. Jorenby, who headed one of the studies. (He has received research funding from Pfizer but not consulting fees or honoraria.) A Pfizer spokeswoman says, "Regarding consultation fees, Pfizer follows standard protocols for consulting agreements and provides adequate disclosure."
One study at the University of Wisconsin and elsewhere shows that during the last four weeks of a 12-week treatment session, 43.9% of patients abstained from smoking on Chantix. By comparison, 17.6% of people on placebo pills kicked their habit. Chantix patients had more success than those on a current drug, bupropion (the brand names of bupropion are Zyban and Wellbutrin, from GlaxoSmithKline PLC), on which 29.8% were able to quit. Another study at Oregon Health & Science University in Portland produced almost identical results to the Wisconsin study.

Other research at the University of Oslo in Norway and elsewhere examined the question of what happened to former smokers after a year. Smokers who had quit during the first 12 weeks of research tended to stay off cigarettes in greater proportions if they were treated with the Pfizer drug than if they were on placebo pills. This effect was more modest -- 43.6% as opposed to 36.9% -- but significant.
"The research was very robust," says Andrea King, an associate professor of psychiatry at the University of Chicago who wasn't involved in the studies.

By far the main side effect with Chantix was nausea, although Norwegian researchers described it as "mostly mild and tolerable." Norwegian researchers said 32% of participants experienced nausea but that "only 3% discontinued the medication because of it." In the Wisconsin study, 29.4% of patients got nauseated, versus 7.4% on Wellbutrin and 9.7% on a placebo.

Nicotine patches and bupropion do help to increase the rate of quitting, but still, most who try to stop smoking aren't successful. "People will tell you that quitting smoking is more difficult than quitting any other addictive behavior," says Robert C. Klesges, a professor of preventive medicine at the University of Tennessee Health Science Center in Memphis.
Nicotine from a patch attaches to nicotine receptors in the brain but doesn't block attachment of more nicotine, so that if someone starts smoking again, he or she will still feel a "reward" from that cigarette. But the patch nicotine is supposed to lessen the urge. Chantix, which the Food and Drug Administration approved in May, attaches to nicotine receptors and blocks nicotine's ability to attach; thus someone isn't supposed to get that physiological "reward" from smoking again. Bupropion is a "dopamine reuptake inhibitor." That means it works through a different mechanism -- prolonging the presence in the brain of chemicals including dopamine, which is believed to play a role in decreasing cravings.
To stop smoking, people are supposed to take Chantix for 12 weeks. Then patients who successfully quit are supposed to take the drug (which comes in pill form) for 12 more weeks to lessen the chance that they will start smoking again. (Since the drug hasn't come to market yet, there isn't a price tag on it.)
Smoking leads to an estimated 420,000 deaths annually in the U.S. alone, from various diseases including cancers, cardiovascular disease and emphysema. Fear of those illnesses causes roughly one-third of smokers to at least try quitting during a typical year. Dr. Jorenby says that "attempt" rate has been fairly constant of late, but that there now are greater percentages of smokers who smoke heavily, or who have depression or anxiety. This confounds the problem, Dr. Jorenby says, because "people with depression have a tough time quitting."

Dr. Jorenby says the effects of Chantix appear to be to increase the quit rate by 1.5 to 2 times, compared with existing drugs. But people in smoking research tend to be highly motivated. And because they live near big teaching hospitals, they tend to be more medically aware and -- apart from smoking -- healthier than the general population. So there are doubts the findings will apply fully to most people.
"Most of these academic centers attract highly motivated, nonrepresentative smokers," says Tennessee's Dr. Klesges, who co-wrote an editorial in JAMA about the new research. "In the real world, the effectiveness diminishes." Moreover, he notes that the fact that some studies excluded people with depression or a history of alcohol or drug use increases the likelihood within the studies of people being able to kick the smoking habit. "Some of these exclusions will increase your numbers" in research reports, he says. So quit rates in the real world may not end up being as impressive.

Dr. Klesges also is skeptical of the findings of the study from Norway that evaluated whether successful cigarette quitters stayed off them for a year or suffered a relapse. In particular, he didn't find it surprising that a relatively greater percentage of people taking Chantix avoided relapses after a year than did those on placebo. After all, these were all patients who had quit smoking by 24 weeks through using Chantix.

"Chances are that if the drug worked for you before, it'll work for you again," he says. "So I think the results are more optimistic than what would really happen."

--- Kicking the Habit Here are some methods to help smokers quit. -- Nicotine patches can reduce the urge to smoke. -- The drug bupropion can reduce cravings by prolonging the presence in the brain of chemicals, including dopamine. -- Chantix is meant to block smoking's psychological 'reward.'

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AstraZeneca, Abbott Plan Cholesterol Combo

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Anglo-Swedish drug maker AstraZeneca PLC (AZN) and Abbott Laboratories (ABT) of the U.S. said Wednesday they plan to develop and market a new combination cholesterol pill, the latest move toward the development of more sophisticated cholesterol drugs.

The companies will study the combination in a single pill of AstraZeneca's cholesterol-lowering medicine Crestor with Abbott's TriCor, a drug that has been approved to treat dyslipidemia, or abnormal levels of substances in the bloodstream that are linked to heart disease. They'll also study a second combination of Crestor with Abbott's follow-up to TriCor known as ABT-335, which is in Phase III trials. They would then choose one of the combinations for final development and commercialization.

AstraZeneca and Abbott indicated both combinations have the potential to offer a three-pronged approach to reducing the risk for heart disease: lowering so-called bad cholesterol, boosting good cholesterol, and reducing triglycerides, which are a type of fat in the bloodstream. Currently, Crestor alone has been shown to reduce bad cholesterol, while TriCor's primary benefits are to reduce triglycerides and raise good cholesterol.

"This allows us to begin studying TriCor and Crestor together to make a single pill which can really manage all the three major lipids, hopefully more effectively than any combination available," Jim Stolzenbach, a physician in Abbott's clinical development program, said in an interview.

Tricor is licensed to Abbott for the U.S. market by Solvay S.A. (SOLB.BT) of Belgium, and both companies are developing ABT-335 as a next-generation version of Tricor. They are known as a fenofibrates.

AstraZeneca and Abbott expect to file for U.S. Food and Drug Administration approval of one of the combinations in 2009.
For AstraZeneca, the move fits into Chief Executive David Brennan's strategy to boost growth from existing drugs through additional uses while the company's pipeline matures in the next five years.

"We believe that our internal research capabilities are core to our success," AstraZeneca spokeswoman Carla Burigatto said. "We recognize there's a need to supplement it with external opportunities."

One London-based analyst said the planned combination treatment is a positive step forward for AstraZeneca, since it's likely to open up a market with good potential.
AstraZeneca shares moved up 0.5% on the news, which was released late afternoon London time. They closed down 0.78%, or 25 pence, at 3179 pence on the day amid a lower London market. The American depositary receipts fell $1.15 to $58.92. Abbott shares rose 7 cents to $43.65.

The deal represents the latest move into developing combination cholesterol pills with various mechanisms. One such example is Vytorin, which contains Merck & Co.'s (MRK) Zocor, a statin drug that lowers bad cholesterol levels, and Zetia, a treatment developed by Schering-Plough Corp. (SGP) that blocks cholesterol absorption from the intestine. Vytorin and Zetia are marketed by a joint venture of the companies.
Also, Merck is studying a combination of Zocor with a version of niacin, a drug that can raise good cholesterol levels. Pfizer Inc. (PFE) is studying a drug called torcetrapib, which also may raise good cholesterol, in combination with Lipitor, a statin and the best-selling drug in the world.
From a health standpoint, these combination therapies hold promise to further reduce the risk of heart disease beyond what statins alone can deliver.

And for the companies, the development of combination drugs has strategic value. Patents for two statins, Merck's Zocor and Bristol-Myers Squibb Co.'s (BMY) Pravachol, recently expired, clearing the way for cheaper generic statins. The branded drug companies want to soften the blow of generic competition by coming up with newer medicines that can command higher prices.

Abbott had already been studying ABT-335 in combination with Crestor as well as with two other statins, Lipitor and Zocor. Stolzenbach of Abbott said Crestor was the most potent of the statins.

Crestor was AstraZeneca's fifth-biggest selling drug last year, with worldwide sales of $1.27 billion, representing a 38% increase from 2004. Its sales were recently given a boost by a clinical trial that showed it could reverse plaque buildup in the arteries. Previous studies had indicated that statins could slow or halt plaque buildup.

Abbott reported 2005 TriCor sales of $927 million, up 19% from 2004.

The AstraZeneca-Abbott agreement is subject to satisfying certain conditions including U.S. antitrust clearance.
In a separate statement, Solvay, which licensed TriCor to Abbott, said it expects the joint venture between AstraZeneca and Abbott will boost revenue it derives from its "fenofibrate franchise."

In the first quarter of 2006, Abbott reported TriCor sales of $205 million, up 20% compared with the same period a year earlier.

Solvay closed down EUR0.9, or 1%, at EUR90.10 in Brussels.

FDA To Weigh Using Fake Blood In Trauma Trial

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IF THE U.S. NAVY gets its way, hundreds of civilian trauma patients could -- without their consent -- be given a blood substitute that has been linked in other large clinical studies to increases in hypertension, heart attacks and other serious cardiac problems.

The Food and Drug Administration has blocked the new Navy trial three times in the past year, but now is reconsidering after months of jockeying among the Navy, the agency and Biopure Corp., the Cambridge, Mass., maker of the blood substitute.

The agency has scheduled a closed-door hearing for next week on whether the Navy-designed trial can proceed. More than 900 badly hemorrhaging civilian accident victims around the country would be involved, with paramedics giving some the blood substitute, called Hemopure, and others saline solution en route to hospitals.

Such non-consent studies are rare but legal where federal regulators determine there's no practical way to obtain consent, such as when patients are in shock or unconscious. There also must be a reasonable likelihood that individual patients would benefit from the treatment under scrutiny.
Scientists have been hunting for a safe, workable blood substitute for decades. Artificial blood, with oxygen-carrying ability, could eliminate the need to match blood types of donor and recipient in some settings, and enjoy a far longer shelf life than donor blood. It could also reduce the risk of hepatitis or HIV infection, although donor blood has become very safe over the past two decades.

The Navy, which provides all medical care for injured U.S. marines and sailors, has been particularly eager for a workable blood substitute. Donor blood lasts only about 42 days before its oxygen-carrying capacity is diminished, while artificial blood could be stored aboard ships for an estimated three years.

But efforts to develop blood substitutes have encountered safety problems over the years. Some companies have gone out of business or exited blood-substitute research when past efforts failed.

Northfield Laboratories of Evanston, Ill., is nearing completion of a civilian non-consent study involving its own blood substitute, PolyHeme, and 720 trauma patients around the country. In a previous trial of surgery patients, 10 of 81 people who received PolyHeme suffered heart attacks, versus zero of 71 receiving donor blood. Northfield says it doesn't believe its product caused the heart attacks, but the Securities and Exchange Commission and Sen. Charles Grassley, chairman of the Senate Finance Committee, are investigating whether the company properly disclosed those results in federal filings and community meetings. Northfield says it is cooperating with the investigations but declined to comment further. Nine of the original 31 medical centers that agreed to participate in the trial are no longer testing patients with PolyHeme.
Past studies have raised questions about Biopure's Hemopure as well. In 1998, the company began a clinical study comparing its substitute with donor blood in consenting orthopedic-surgery patients. William G. Hoffman, then Biopure's medical director and now director of cardiac-surgery critical care at Massachusetts General Hospital, says he concluded during the study that the blood substitute wasn't working well and was "harmful," and urged Biopure to stop the trial. Edward Jacobs, a Biopure founder and then senior vice president, says the company consulted outside cardiologists and "their opinion was to go ahead."

Evidence from that study, along with a separate study in general surgery patients, linked Hemopure to more complications such as strokes and mini-strokes than donor blood, FDA documents show. Biopure disputes some of the FDA numbers. But in a draft response to the agency, Biopure acknowledges that there were more cases of cardiac arrest, more fluid in the lungs and more hypertension among patients who got Hemopure than those who received donor blood.
Navy officials declined to comment on why they want to conduct a trial with a product that has shown such negative side effects. But in documents submitted to the FDA, the Navy has maintained that a study of trauma patients would be significantly different from the trial with surgery patients. The Navy also argues that the oxygen-carrying capacity of Biopure's product could lower the death rate in trauma patients by 25% versus patients getting saline. "If we could replace saline with the thing that we need most, oxygen-carrying capacity, that would be the best," says the Navy's Surgeon General Vice Admiral Donald Arthur. "Our interest is in field conditions where there is no blood."

Biopure's vice president for medical affairs, A. Gerson Greenburg, says the company's product "has an acceptable safety profile" and that a blood substitute can serve "a societal good whereby you're saving [donor] blood for other people." He says many adverse events in past studies weren't necessarily linked to Hemopure.

The Navy proposed the new study of civilian trauma patients in 2004, saying that conducting such a study in combat wouldn't be practical. Documents show the FDA concluded, based on its review of existing Biopure research on surgery patients, that there were "highly significant differences" showing more "serious adverse events" with Hemopure than with blood. On July 8, 2005, the FDA told the Navy its study couldn't proceed "because subjects would be exposed to an unreasonable and significant risk of injury."

Daniel Freilich, who heads Navy blood-substitute research, responded with a series of letters criticizing the FDA, writing in one that the agency's stance "is not scientifically and clinically rigorous." The Navy also argued that the FDA had permitted Biopure's competitor, Northfield, to pursue its own study with a similar product.

On Oct. 13, Biopure CEO Zafiris G. Zafirelis wrote to Jesse Goodman, director of the FDA's Center for Biologics Evaluation and Research, suggesting that an FDA reviewer wasn't objective and had a possible conflict of interest. In March, the FDA's Dr. Goodman wrote to Mr. Zafirelis that he had assigned three other high-ranking officials to preside over Biopure decisions, according to the people familiar with the matter.
Earlier this year, the FDA scheduled the advisory panel meeting for next week. In an unusual step, the Navy, the sponsor of the proposed research, was able to recommend some doctors to be on the panel. Additionally, two well-known skeptics of substitutes who initially had been named as advisory consultants to the panel -- Charles Natanson, a critical-care specialist with the National Institutes of Health and John Hess, director of the University of Maryland's blood bank -- have in recent weeks been disinvited.

UCB CEO: Crohn's Disease Drug Cimzia May Be Market Leader

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UCB S.A.'s (UCB.BT) Crohn's disease drug Cimzia doesn't just have the potential to become a blockbuster when it's launched next year, but it could also become the leading drug in its market, Chief Executive Roch Doliveux said Friday.

"I see no reason why we shouldn't aim at market leadership," Doliveux said on the sidelines of an industry conference in Prague.

Once it's launched in the first half of next year, Cimzia will compete against Johnson & Johnson's (JNJ)Remicade, currently the only biologic drug approved for Crohn's disease, an inflammatory disorder of the gastrointestinal tract.
It will also compete against Humira, a drug codeveloped by Abbott Laboratories (ABT) and Cambridge Antibody Technology Group PLC, (CAT.LN) now part of AstraZeneca PLC (AZN).

Both Humira and Remicade have reached blockbuster status, with annual sales exceeding the $1 billion mark.

"When you have two products whose combined sales are larger than UCB, it's only a matter of when, not if, Cimzia will become a blockbuster," Doliveux said.

UCB has a market capitalization of around EUR6 billion. Last year, its sales totaled EUR2.3 billion.

UCB has transformed itself into a pure biopharmaceutical company through the acquisition of U.K. biotech company Celltech in 2004 for GBP1.5 billion and the divestment of its chemical operations.

The Celltech acquisition brought in Cimzia, which has been filed for regulatory approval with U.S. Food and Drug Administration, which should give its response in the second half of 2006.

The drug is also being studied for the treatment of rheumatoid arthritis, with phase III results due in the fourth quarter of this year.

Unlike its competitors, Cimzia is administered once monthly.

FDA Approves Genentech Drug For Eye Disease

The Food and Drug Administration approved a drug Friday that's been shown to improve vision in patients with a type of age-related macular degeneration that causes blindness.
The drug Lucentis, by Genentech Inc. (DNA), South San Francisco, Calif., is the first FDA-approved treatment that's been shown to stabilize vision in the vast majority of people with so-called wet AMD and improve it in many others. Genentech is majority-owned by Roche Holding AG (RHHBY) of Switzerland. Swiss-based Novartis AG (NVS) was also involved in the development of Lucentis.

The drug was approved under the FDA's priority review mechanism, which cuts about four months off the typical 10-month drug review time and is usually reserved for drugs the agency deems would be a "significant improvement" compared with existing treatments.

Genentech said it would begin shipping the product Friday.
"Lucentis provides new hope for patients with wet AMD because it is the first therapy to provide a benefit in vision for a significant number of patients," Genentech Chief Executive Arthur Levinson said in a press release.

About 15 million Americans have age-related macular degeneration, and roughly 10% of those suffer from the so-called wet form of AMD, which causes most cases of blindness from AMD. Wet AMD occurs when abnormal blood vessel growth harms or destroys part of the eye.

Lucentis, which is a variation of Genentech's cancer drug Avastin, is designed to inhibit a protein needed in blood vessel formation. It would be injected into the eyes every month.
Lucentis, however, is generating controversy among eye doctors because some of them had already started using Avastin to treat wet AMD at a fraction of the cost of cancer treatment because less drug is needed. At least one local Medicare plan decided last month to pay for use of Avastin in the eye even though the drug is not FDA approved for that use. Genentech has not promoted Avastin as an eye treatment and has been focused on developing Lucentis.

In late 2004, the FDA approved a drug, Macugen, developed by OSI Pharmaceuticals Inc. (OSIP) and Pfizer Inc. (PFE), which was shown to slow vision loss. Wiley Chambers, FDA's deputy director of its anti-infectives and opthamologic products division, said Macugen and another wet AMD treatment, Visudyne, marketed by Novartis and QLT Inc. (QLTI), have shown "variable results" in patients and improve vision in about 5% to 10% of people using the drugs. Clinical studies of Lucentis showed the drug improved vision in about one-third of patients in the clinical trials, Chambers explained.
Friedman Billings Ramsey analyst Jim Reddoch predicts Lucentis sales of $84 million this year, rising to $457 million in 2008. In comparison, Genentech's Avastin sales were $1.1 billion in 2005.

The company expects Lucentis to cost $1,950 per dose, and the average patient would receive five to seven doses per year, for total annual costs of $9,750 to $13,650, according to Quinton C. Oswald, Genentech's vice president sales and marketing, tissue growth and repair.

While its recommended that Lucentis be injected monthly, FDA's Chambers said some patients might be injected on a less frequent basis.

The drug was involved in two Phase III studies that looked at about 1,100 patients. The studies compared Lucentis to either a sham injection or Visudyne. Genentech said that 95% of people taking Lucentis maintained their vision after one year, and up to 40% had vision improvement, defined as being able to read three more lines, or 15 letters, on eye charts.
The studies of Lucentis showed the most common adverse reactions among patients treated with Lucentis included conjunctival hemorrhage, eye pain, vitreous floaters, increased intraocular pressure and intraocular inflammation.
Genentech expects to get Medicare coverage for Lucentis "immediately." The company will contribute to programs designed to assist patients who can't afford Lucentis.
Shares of Genentech closed Friday at $81.80, up $1.67, or 2.1%.

Cervical-Cancer Vaccine Backed By Panel

A federal vaccine advisory panel unanimously recommended that 11- and 12-year-old girls receive a new vaccine designed to protect against cervical cancer. (information source: www.chartsbank.com/PipelineList.aspx )

The Advisory Committee on Immunization Practices -- which advises the Centers for Disease Control and Prevention concerning vaccination matters -- said the vaccine, Gardasil, by Merck & Co., should be added to the routine vaccination schedule for children and adolescents.

The vaccine protects against four strains of the human papillomavirus, or HPV, two of which account for about 70% of cervical-cancer cases and two that account for about 90% of genital warts.

The panel's vote makes it highly likely that the vaccine will be covered by the nation's private insurers. After the vote, at least one large health insurer, WellPoint Inc., said it will cover the vaccine.

The panel also voted to add the vaccine to a federal program that pays for vaccines for uninsured or low-income children up to age 19. The Vaccines for Children program covers the cost of vaccinating as much as 50% of the childhood population in the U.S. and doled out roughly $1.7 billion in funds last year, CDC officials said. The cost of adding Gardasil to the program could be significant. Merck has priced the vaccine at $120 per dose for a three-dose regimen.

While the government is expected to receive a discount on the vaccine, as many as one million 11- and 12-year-old girls could be eligible for funding under the federal vaccine program. Even if just 20% of them receive the vaccine in the first year, as CDC officials estimate, that could cost as much as $72 million.

The panel also said that doctors could vaccinate girls as young as 9 years old and that girls and women ages 13 to 26 should receive the vaccine even if they already have become sexually active. Federal funds could be used for children up to age 19 if they qualify.
If study data show the vaccine protects against HPV infection in males and in women older than 26, the CDC's vaccination recommendations will likely follow suit, said Anne Schuchat, director of CDC's National Immunization Program.

The panel recommendations go to the CDC director and the Secretary of Health and Human Services for final approval, which is expected in the next few months.

Pfizer To Make Generic Version Of Its Zoloft

IN THE LATEST salvo of big drug companies' aggressive campaign against generic competition, Pfizer Inc. executives disclosed plans to introduce a heavily discounted generic version of the antidepressant Zoloft after the brand-name drug loses domestic patent protection tomorrow.

Pfizer's plans for Zoloft, the best-selling antidepressant in the U.S. and the company's third-biggest product, with $2.57 billion in U.S. sales last year, follow Merck & Co.'s move to undercut generic-drug makers offering copycat versions of Merck's blockbuster cholesterol fighter Zocor when it lost patent protection last week.

Until recently, brand-name drug makers practically walked away from hit medicines once their patent exclusivity elapsed. But facing patent losses on drugs with $39 billion in sales over the next couple of years, as well as a scarcity of new drugs, more brand-name companies are tapping into the generics business to retain a sliver of sales and, some critics say, to weaken competition from traditional makers of generics over the long haul.

Typically, when the patent for a branded drug is ruled invalid or expires, its maker continues to offer it to those patients who can afford to disdain generics; but at the same time, the brand-name company licenses the newly nonpatented but identical formula to selected generic-drug manufacturers, with whom it splits the revenue.

The practice, producing drugs known as authorized generics, preserves sales for the original maker but also serves as a jab in the eye of any generic-drug maker that might have successfully challenged the brand-name drug maker's patent on the product. A successful challenger wins a six-month period of exclusive sales.

Merrill Lynch specialty-drug analyst Gregg Gilbert estimates that a single generic typically is priced 35% to 40% less than the brand-name medicine during the six-month exclusive period and, if left alone, can capture 90% or more of the market from the brand-name it copies. But when an authorized generic is part of the mix, prices drop by 50% or more during the exclusive period, he said, and the patent challenger often winds up with roughly half the market share it would have had on its own.

Some critics say the real reason for the brand-name industry's sudden interest in generics is to discourage patent challenges in the first place. Brand-name pharmaceutical makers counter that authorized generics lower drug prices more quickly. But federal regulators are looking at whether the short-term savings are overshadowed by less competition over time.

Pfizer, legendary for its combative stance against generic challengers, is reluctant to share even a penny of sales. Instead, the company is making and marketing the generic versions of its drugs almost entirely by itself, through a little-known division called Greenstone Ltd. "We see an opportunity with our big medicines coming off patent," said Pfizer Chairman and Chief Executive Henry McKinnell. "The generic companies hate it, of course. They don't want the competition."

Bruce Downey, chairman and chief executive of Barr Pharmaceuticals Inc., a big generic maker that opposes the practice of authorized generics, says Pfizer has turned Greenstone "into an offensive weapon to discourage companies from trying to challenge their patents" by cutting into the exclusive sales period that is the prize of a legal victory.

Johnson & Johnson is testing Pfizer's approach with a few products through a subsidiary called Patriot Pharmaceuticals. Schering-Plough Corp.'s Warrick generics subsidiary does the same for a broader line of company has-beens. "It's not a very profitable business, but it helps us soak up some manufacturing overhead," said Fred Hassan, Schering-Plough's chairman and chief executive.
But Pfizer is far ahead. Greenstone's sales tripled to $722 million in 2005, making it the No. 7 generics concern in the U.S., according to data from IMS Health.

Pfizer doesn't disclose Greenstone's sales, but its top products include generic versions of of blood-pressure pill Accupril, epilepsy medicine Neurontin and antibiotic Zithromax, which went generic late last year. Greenstone sells only Pfizer drugs, not knockoffs of other companies' brands, and operates exclusively in the U.S.

When Pfizer's Mr. McKinnell was asked recently whether Greenstone aimed mainly to give generic-drug makers fits or to preserve some sales for Pfizer, he quipped, "Both are good things."

The Federal Trade Commission is preparing to analyze the effects of authorized generics on drug prices and competition in a study that could be completed next year.

"Clearly, there ought to be a short-term benefit to consumers; prices should go down, but we're not certain of it," said Jon Leibowitz, an FTC commissioner. The larger question, he said, is whether authorized generics dissuade generics companies from pursuing some drugs, particularly those that aren't huge sellers, and lessen competition in the long run.

The combined effect of authorized generics on market share and price for a patent challenger guts the value of the exclusive period, according to Israel Makov, CEO of Teva Pharmaceutical Industries Ltd. "They make the prize an empty prize,"he says.
At the end of this week Teva could begin selling generic Zoloft, or sertraline. Teva gained the exclusive right to sell sertraline for six months under a settlement between Pfizer and patent challenger Ivax Corp., acquired by Teva in March. As soon as Teva starts selling sertraline, Pfizer's Greenstone is expected to jump in too.

Pfizer's Mr. McKinnell said there is still plenty of sales and profits to go around even when an authorized generic is part of the mix.
"I don't think we're going to do too much damage to the generics companies," he said. "We're not going to put them out of business."

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HPV Vaccine Stirs Economic Debate

While a debate rages over the morality of giving girls as young as nine Merck & Co.'s new Gardasil vaccine against the sexually transmitted human papillomavirus, a separate economic concern is emerging over the vaccine's hefty price and its impact on the nation's health-care costs.

After gaining regulatory approval on June 8, Merck's Gardasil was priced at $360 for a three-shot regimen, making it one of the priciest vaccines now on the market. The vaccine would be given to adolescent girls to reduce their risk of HPV-linked cervical cancer later in life. Immunizing 12-year-old girls alone could cost insurers and the government up to $700 million a year just for the vaccine.

Merck and others argue that when Gardasil's costs are compared with its potential impact on women's health, the vaccine could be considered a bargain. Some studies have found that the vaccine would be cost effective by providing additional protection against cervical cancer, reducing the frequency of abnormal pap smears and allowing screening to be conducted less frequently. Other experts argue that much is still unknown about the vaccine, such as whether booster shots will be needed and how widely it will be adopted.

The question of cost effectiveness will be among the issues discussed at the Centers for Disease Control and Prevention today and tomorrow, when the Advisory Committee on Immunization Practices meets to formulate its recommendations regarding HPV vaccines. The ACIP will consider whether girls and women should be vaccinated, the recommended ages for the shot, whether a booster is needed, and -- most crucially for the drug's maker -- whether the vaccination should be part of a routine immunization regimen.
Some opponents have argued that inoculating girls against a sexually transmitted disease might send the message that sexual activity is acceptable. Public comments along these lines may occur at the meeting.

The CDC's recommendations serve as best-practice guidelines for doctors. Insurers often follow the CDC recommendations in covering the cost of vaccinations. Merck has a strong track record winning recommendations for its childhood vaccines, but Gardasil is unusual because it targets a young population in order to prevent a fairly rare cancer in the U.S. that usually doesn't strike until middle age or later.

HPV infection is a significant cause of cervical cancer, which each year is diagnosed in an estimated 9,700 women (by comparison, there are 215,000 breast-cancer diagnoses a year). Gardasil aims to prevent infection from four strains of the HPV virus, including two strains that are considered high-risk for cancer. Many other HPV strains also exist.
The cost of cervical-cancer detection and treatment is high. Pap smears, which look for early signs of cancer, cost about $30 a test, and follow-up testing required for abnormal Paps is even more expensive. Treating cervical cancer costs the Medicare system alone about $1.7 billion a year.

Many of the cost-benefit studies done to date involved Merck or GlaxoSmithKline PLC, which is also developing an HPV vaccine. In many studies, including some done independent of drug companies, HPV vaccines like Gardasil appear cost effective if used to inoculate 12-year-old girls, giving them a booster shot five to 10 years later, and providing Pap smears every two or three years. The studies generally calculate cost effectiveness as a measure of the quality years of life that the intervention saves across the population.

Although there's no formal rule, interventions under $50,000 to $100,000 per quality-adjusted life year are generally considered cost effective. Vaccines for measles and mumps are so cost effective they actually save money. On the other hand, Pap smears, which test for early signs of cervical cancer, run anywhere from $150,000 to $1 million per quality-adjusted year of life saved if given annually rather than every three years, health-services researchers say.

These analyses also raise questions of exactly how many girls need to be vaccinated in order for rates of infection -- and later cervical cancer -- to decrease in the population as a whole.
Gillian Sanders, a cost-effectiveness analyst at Duke Clinical Research Institute, has conducted two HPV vaccine cost-effectiveness studies. Dr. Sanders's analysis shows that because of "herd immunity" -- when a vaccine's impact goes beyond just the people who are inoculated -- only about 70% of girls need to be vaccinated to bring the rate of cervical cancer down significantly in the population as a whole.
Many nations, including England, Australia, and Canada, use cost-effectiveness information to help make coverage and pricing decisions about treatments. The U.S. tends to shy away from formally using the information. Medicare, for instance, doesn't take costs into account in coverage decisions. The government-run vaccine fund for uninsured children doesn't either.

Cost-effectiveness calculations, however, can vary tremendously depending on what is included in the models, according to Marthe Gold, a professor at City College of New York who organized the U.S. Panel on Cost-Effectiveness in Health and Medicine in the 1990s that examined inconsistencies in how such analyses were conducted.
And some factors can't be predicted, such as whether another strain of HPV will develop if the currently most prevalent strains are eliminated. Data from Merck's Phase II and III trials suggest that no type replacement occurred in those studies, according to Merck spokeswoman Mary Elizabeth Blake, but Merck will be watching closely to see what happens to the HPV viruses when the vaccine is introduced.
Another issue is just how long the vaccine will be effective. So far the data show that the vaccine is good for at least five years, according to Ms. Blake.

Sanofi-Aventis Launching Obesity Drug In UK

French drug maker Sanofi-Aventis SA (SNY) is launching its closely watched obesity drug Acomplia in its first market Wednesday - the U.K. - where it will charge GBP55.20 for one month's supply of the product, Sanofi officials said.

Sanofi recently received approval from European regulators to start selling Acomplia and will launch the drug in other European markets in the coming months. In February, the U.S. Food and Drug Administration postponed approving the drug, asking for more information on it. Sanofi says it expects to begin selling Acomplia in the U.S. before the end of the year.
Acomplia is the most important drug in Sanofi's pipeline, as analysts estimate its sales could reach $3.5 billion to $5 billion annually if it is approved in the U.S. as well. Obesity is an increasingly pressing health problem worldwide, but there aren't many available drug treatments for it.

European authorities have approved the drug as an adjunct to diet and exercise for the treatment of obese patients, or for overweight people who also have type-2 diabetes or dyslipidemia - an abnormally high level of cholesterol in the blood. Tony Whitehead, Sanofi's medical director in the U.K., said at a press conference that the company planned to market the drug as a serious medical treatment, and not as a mere cosmetic tool for slightly plump people.

In an early indication of how the drug is likely to be prescribed, several physicians invited by Sanofi to speak at the press conference said they likely wouldn't prescribe Acomplia to a new obese patient until he had first tried diet and exercise. "On a first appointment, they won't get a prescription for any weight-loss medication," said David Haslam, a physician and chairman of the National Obesity Forum. He said "first-line" treatments, meaning diet and exercise, "will always be used first."

John Betteridge, a physician and professor of endocrinology and metabolism at University College London, said he probably would wait at least three months with a new patient to see whether diet and exercise were working before adding Acomplia.

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