Bend Research Signs License Agreement With Eli Lilly & Company

Bend Research Inc., a leading independent drug formulation development and manufacturing company, recently announced it has entered into a licensing agreement with Eli Lilly and Company. Under the terms of the agreement, Bend Research will make its proprietary spray-dried dispersion (SDD) technology available to Lilly. This technology, which improves the bioavailability of compounds with low aqueous solubility, has been applied successfully to hundreds of compounds at various stages of development, from preclinical studies to Phase III clinical trials. Lilly formulators and scientists will also have broad access to Bend Research’s portfolio of other drug delivery technologies.

In addition, as part of an already existing agreement with Lilly, Bend Research will continue to provide formulation, development, analytical, engineering, and manufacturing services to Lilly to support its preclinical and clinical development programs.

“This expansion in our relationship with Lilly is a great milestone for us,” said Rod Ray, Chief Executive Officer of Bend Research. “Our teams work well together and have a shared commitment to bring the best new medicines to caregivers and patients. We believe this collaboration will add significant value to Lilly’s research efforts and help them advance their compounds more quickly and efficiently.”

For more than 35 years, Bend Research has worked with clients to create value by advancing new medicines that improve human health and to solve their most difficult scientific and technical problems. This success is based on the company’s ability to develop, advance, and commercialize pharmaceutical technologies, which grow from a solid base of scientific and engineering fundamental understanding.

Bend Research provides formulation and dosage-form support, assists in process development and optimization, manufactures clinical-trial quantities of drug candidates in its cGMP facilities, and advances promising drug candidates from conception through commercialization. Bend Research is a leader in novel formulations, including SDDs and hot-melt extrusions, and controlled-release, inhalation, and biotherapeutics technologies.

CHEMO & Particle Sciences Partner to Provide the Only Development-to-Commercialization Solution

Particle Sciences Inc. and CHEMO recently announced they have formed a partnership to offer complete contract product development and commercial manufacturing of hormone-eluting devices. Particle Sciences is a world leader in the formulation, testing, and scale-up drug/device combinations and has been working with CHEMO for several years on a number of hormone-based polymeric combination products.

“In our work with CHEMO and others, it became clear there was no complete solution for companies wishing to develop and commercialize hormone-based combination products,” said Mark Mitchnick, CEO of Particle Sciences. “CHEMO is basic in many hormones, a well-respected global supplier, and has strong global marketing capabilities in WHC. Particle Sciences has the intellectual property, infrastructure, and development capabilities to rapidly get such products into the clinic. By combining our efforts, CHEMO and Particle Sciences now offer the only complete solution for combination product development. CHEMO has proven to be an excellent partner, and this is consistent with our business model of making sure our clients are positioned in the best possible competitive situation, in this case, by providing a rapid, cost-efficient path to commercialization.”

Under the agreement, the two companies will leverage each other’s strengths to provide a start-to-finish contract solution for those looking to develop and market hormone-eluting devices. Particle Sciences will execute the development work, establishing design, performance, scale-up parameters, analytic and QC methods, and producing clinical trial materials in their cGMP facility. CHEMO will assume production and fulfillment roles in mid-to-late clinical testing and through to commercialization. The companies are already successfully working on several products under this model with the first ones having already entered the clinic last year.

“Particle Sciences has a top-tier technical team and an excellent facility,” said Lucas Sigman, CEO of Chemo’s US subsidiary. “This relationship is yet another step in CHEMO’s global technology-based expansion. As an API supplier and FDF manufacturer, bringing in hormone-based combination product capabilities is a natural step and one that we are very enthusiastic about.”

Particle Sciences is an integrated provider of drug development services, focusing on emulsions, gels, micro- and nano-particulates, drug/device combination products- and highly potent compounds across all dosage forms. Through a full range of formulation, analytic, and manufacturing services, Particle Sciences provides pharmaceutical companies with a complete and seamless development solution that minimizes the time and risk between discovery and the clinic.

Cytomedix Acquires Aldagen

Cytomedix, Inc. recently announced the completion of the acquisition of Aldagen, Inc., a privately held biopharmaceutical company developing regenerative cell therapies based on its proprietary ALDH bright cell (ALDHbr) technology. Under the terms of the transaction, Cytomedix issued preferred shares valued at $16 million based on a 10-day volume-weighted average price calculated through February 2, 2012. Cytomedix will issue additional consideration to be paid in common stock upon the successful attainment of several clinical milestones. As part of the transaction, certain Aldagen investors purchased $5 million of Cytomedix common stock in a private placement concurrent with the closing of this acquisition.

“Since joining Cytomedix as CEO in 2008, our strategy has evolved, but the vision to transform the company from a wound-care-based technology platform into a broader regenerative medicine company has remained constant. In pursuit of this vision, we started with the successful 2010 acquisition and integration of the Angel System, a unique, best-in-class PRP platform technology that has allowed us to grow from nominal sales to $6 million per year in just over 18 months,” said Martin P. Rosendale, CEO of Cytomedix.

“This strategic acquisition of Aldagen provides Cytomedix with a novel, patent-protected cell selection technology that fits well with our existing commercial products and strengthens our long-range growth profile,” he continued. “In combination, we now touch the three pillars of regenerative medicine with autologous stem cells, platelet-derived signal molecules, and plasma scaffolds. We view the acquisition of Aldagen as an opportunistic transaction at an attractive valuation that will allow us to build and expand our new product development efforts with Aldagen’s technology, intellectual property, people, and clinical expertise. In terms of maximizing opportunity for our shareholders while managing and mitigating risk, we believe this transaction is very advantageous.”

At the closing, Cytomedix issued 135,398 newly designated Cytomedix Series E preferred shares to Aldagen shareholders. Pro forma for the conversion of these shares to common stock, as set forth in the designations documents for the Series E preferred stock, Aldagen shareholders will own approximately 17.3% of Cytomedix common shares outstanding after the concurrent conversion and/or redemption of all existing Cytomedix preferred shares.

There are also contingent clinical milestone payments totaling up to 20,309,723 shares, which will be issued to Aldagen shareholders upon the achievement of predetermined clinical milestones associated with an ongoing Aldagen Phase II trial in post-acute ischemic stroke. Notably, 80% of this contingent consideration is issuable only upon a favorable clinical efficacy signal in the aforementioned trial. The costs of the clinical trial will be funded, in part, by the $5 million investment made by Aldagen shareholders, $3 million in proceeds from completed or committed warrant exercises by existing Cytomedix shareholders, as well as a portion of Cytomedix’ cash on hand. All up-front and contingent consideration shares are subject to lock-up restrictions ranging from 6 to 18 months.

Daiichi Sankyo Seeks to Acquire Three Indian Pharma Firms

Daiichi Sankyo, which in 2008 acquired Ranbaxy, is in takeover talks with at least three mid-sized Indian pharmaceutical companies. Daiichi Sankyo has appointed IMS Consulting Services for the talks and is seeking companies with an annual turnover of Rs300-500 crore that have drugs for treating diabetes, rheumatology, and women’s healthcare.

Tokyo-based Daiichi made its last acquisition in April 2011, when it spent $935 million to purchase Berkeley, California-based cancer drug firm Plexxikon in order to step up its presence in the oncology market. However, its biggest acquisition to date is the 2008 purchase of a majority stake in generic drug company Ranbaxy Laboratories, for around $4.6 billion.

Formed through the 2006 merger between Daiichi and Sankyo pharmaceutical companies, Daiichi Sankyo expanded its generic drug business by establishing Daiichi Sankyo Espha Co in 2010.

Vectron Biosolutions Obtains Strong Results for Biosimilar Production

Vectron Biosolutions recently announced they have obtained strong results for manufacture of selected biosimilar proteins using its proprietary E. coli expression technology. The study was conducted side-by-side with other expression technologies, and Vectron’s technology produced higher soluble and/or insoluble yields for seven out of 10 tested biosimilar proteins. The increase in yield was 2 to 25 times compared to the best conventional technology.

The biosimilar proteins that were produced more efficiently with Vectron’s technology than with other technologies were human growth hormone, interferon beta-1b, TNF alpha-1a, IGF-1, insulin, IL-2, and IL-1RA.

“Demonstrating that our technology is superior for manufacture of many valuable therapeutic proteins is a major milestone for us,” saidd Trond Erik Vee Aune, CEO of Vectron Biosolutions AS. “Significant increases in soluble and insoluble yields translate directly to large savings in cost of goods for our pharmaceutical partners, especially in the highly competitive biosimilars market, where cost-efficient manufacturing processes are essential. In addition, demonstrating that our technology can be used to obtain many-fold higher titers means our services and technology is highly suitable for new therapeutic proteins being developed, especially those in which low solubility and/or low yields are a complicating issue.”

Through a combination of experienced life science researchers, state-of-the-art laboratory facilities, a proprietary technology platform, and competent management, Vectron Biosolutions AS supplies the pharmaceutical industry with state-of-the-art technology and solutions for manufacture of recombinant proteins in E. coli and other bacteria.

Watson Seeks Brand-Drug Profits in Shift From Copycats

Watson Pharmaceuticals Inc. CEO Paul Bisaro is looking to acquire brand-name drug assets and make a future “”˜transformational” purchase as he reshapes the generic-drug maker. Mr. Bisaro indicated he wants to use an estimated $6 billion the company will have available for acquisitions to invest in brand-name medicines with the potential for greater growth and consistent returns. Watson will consider drugs for gender-specific conditions as it builds toward a “big brand deal” to supplement its generic lines.

“Everything we need to be a branded pharma company we have, except for the sales force. And we can create that,” said Mr. Bisaro.

While medicines with $48 billion in annual sales face generic rivals for the first time in 2012, fattening revenue for generic drug makers, the figure will fall to an annual average of $24 billion in the next 3 years, according to IMS Health Inc., a Danbury, CT-based researcher. Watson’s strategy resembles actions by Teva Pharmaceutical Industries Ltd. as generic drug makers, which profit by copying the medicines of brand-name pharmaceutical companies, start to imitate the business models of those companies too.

“It’s a real blurring of the lines. By 2015, such drug makers may end up looking a lot more like a brand than a generic,” explained Jeff Jonas, an Analyst with Gabelli & Co., in Rye, NY.

The appeal of the branded-drug business comes from the returns it offers on exclusive products. In the US, companies that invent new drugs get a combination of patent protection and exclusive sales rights when they bring the drugs to market. After those protections run out, the generic drug makers can file with regulators to sell copycat versions without paying royalties to the inventors.

Patent and exclusivity periods vary by country, and in the US, can be extended if the drug maker finds new uses for their product. Brand-name medicines enjoy about 12 years on the market before copycat versions become available, according to study published in 2007 in Managerial & Decision Economics.

Generic drug companies are rewarded for being the first to start the process of making a copycat version. The first company to successfully challenge the patent protection gets 180 days of exclusive rights to sell the generic version, typically at a price not much lower than the brand. Once the first generic company loses its head start, others can enter the market, and the price falls further.

Watson had $2.19 billion in revenue related to generics in the first 9 months of 2011, dwarfing its $320.1 million from global brands, according to a company filing. That may change, for Watson has the pieces in place to become more like traditional pharmaceutical companies, such as Pfizer Inc. and Roche Holding AG.

Mr. Bisaro is aware of the perils, though. “Generic companies in the past, their mistake has been to run their business like they run their generics model, which is pretty opportunistic. With brands, you have to pass on those things that, even though you like the idea, if it’s not in your wheelhouse and you don’t have the sales force, you probably ought not to spend the money on it.”

Since Mr. Bisaro took over as CEO and President in September 2007, Watson has completed or announced nine acquisitions, with a total value of $2.84 billion, according to data compiled by Bloomberg. The biggest was the $1.75-billion purchase of Arrow Group, a generic drug maker, in 2009. Watson paid $405 million last month for Ascent Pharmahealth Ltd., an Australian maker of copycat pills. In July 2010, Watson bolstered its position in brands by acquiring Columbia Laboratories Inc.’s progesterone assets. Watson will limit its focus to a few clinical areas.

“We have a lot of goodwill built up in the urology space, and we’re getting there in the women’s health space,” said Mr. Bisaro. “We might also see opportunities in oncology, such as bladder cancer or malignancies specific to women. With more growth in coming years, Watson may be in a much stronger position to buy a bigger specialty brand company. That would be a very nice scenario if it worked out that way.”

The company has 20 medicines in the last of three phases of testing before regulatory approval, including products to treat pain, cancer, and auto-immune disease. Copaxone, the multiple sclerosis drug, accounted for 24% of sales in the 2011 third quarter.