January 2006

CONSOLIDATION

Merck to Cut Plants, Jobs, Streamline Manufacturing

Merck (Whitehouse Station, NJ, www.merck.com) has revealed the "first phase" of its global restructuring program set to eliminate 7000 jobs (11% of its global workforce) by the end of 2008, close or sell 5 of its 31 manufacturing facilities, and roll out a manufacturing strategy to "drive significant efficiencies, decrease headcount, and reduce or refocus operations throughout the plant network and the entire manufacturing division." The company also expects to close one basic research site and two preclinical development sites.

About half of the 7000 position cuts are expected to take place in the United States. The Flint River plant in Albany, Georgia, will be among the first to close unless a buyer is found by the fall. The company's Riverside, Pennsylvania, facility and its only Canadian site outside of Montreal also face initial shutdowns. Meanwhile, Merck's oldest long-term manufacturing plant, in Rahway, New Jersey, will be restructured as a producer of drugs for late-stage product testing.

The manufacturing strategy will include an implementation of manufacturing guidelines designed to reduce production costs, inventory, and cycle time. A pilot program at the company's Arecibo, Puerto Rico, site is already underway and has reportedly resulted in a 50% reduction in on-site cycle time and a 30% reduction in on-site inventory.

Merck plans to create "a new commercialization organization" as part of the manufacturing division to speed delivery of its pipeline products. It will identify dedicated commercialization facilities to support late-phase clinical trial production needs with the aim of cutting 12–15 months from the time it takes to develop production process and manufacture launch supplies.

The move comes as no surprise to many industry analysts. The restructuring was anticipated as the company trudges through litigation over its "Vioxx" brand and positions itself for next year's patent expiry of its popular "Zocor" cholesterol-lowering drug, which accounts for $5 billion in sales, and the expected loss of its patent on "Fosamax" in 2008.

Others say these factors are only catalysts, not causes. As an article in the Nov. 26 issue of The Wall Street Journal pointed out, "what mostly ails Merck is the dearth of new drugs in its pipeline." Cheryl Buxton, global managing director of Korn/Ferry International's Global Healthcare market group (Princeton, NJ), agrees. "This is a reaction to a changing pharmaceutical industry. Pipelines are less prolific with drugs. Patent issues are a constant concern for all Big Pharma companies as well as pricing pressures. All [of the companies] have reacted in different ways, except for Merck. Most of [the Big Pharma companies] have done their downsizings or acquisitions, but Merck hasn't. Vioxx may be a catalyst, but it is not the cause."

–Maribel Rios

CONSOLIDATION

Pfizer to Shut Parsippany Plant

In a move to consolidate manufacturing plants, Pfizer (New York, NY, www.pfizer.com) revealed Nov. 17 that it would eliminate its Parsippany, New Jersey location by year end 2008, laying off approximately 128 employees by the start of 2006.

The company stated in a release that the 490 workers currently employed at the site will receive as much support as possible during this transition period, including severance, job placement assistance, and other benefits. "Those who wish to remain with Pfizer will have an opportunity to apply for openings for which they qualify at other locations within the company," said MacDara Lynch, Pfizer's vice-president of manufacturing for the eastern United States and Canada.

There are no plans to reduce the 75-person workforce at Pfizer's logistics and distribution center, also located in Parsippany.

The Star Ledger newspaper reported last Friday that Pfizer had received $25 million in sales tax exemptions from the state of New Jersey for its retention of 2070 jobs. This came on top of $30 million already awarded for creating 1100 jobs in New Jersey. Pfizer, however, contends that the tax breaks were for past benchmarks, not for future endeavors. According to Pfizer, the company has a $400-million building project underway at its Morris Plains, New Jersey site.

The phase-out of the Parsippany plant is part of an ongoing initiative to align global manufacturing capacity with product demand and to adjust manufacturing operations to address changing market conditions, said Lynch in a release. "Pfizer began a review of all its global manufacturing facilities in 2003 following its acquisition of Pharmacia. Over the past two years the company has announced plans to divest or close more than two dozen plants around the world, reducing the number of its manufacturing facilities from 93 to 66."

Lynch said Pfizer will try to sell the Parsippany plant as an ongoing operation, but plans to close it by the end of 2008 if a buyer cannot be found. "A number of pharmaceutical and consumer health products presently manufactured at the facility—including "BenGay," "Desitin", "Visine," and "Zyrtec" syrup—will be transferred in phases to other plants."

–George Koroneos

REGULATION

OTC Eye-Drop Maker Signs Consent Decree

On Nov. 29, MBI Distributing, Inc. (MBI, Benicia, CA), also known as Molecular Biologics, signed a consent decree with the US Food and Drug Administration, in which MBI agreed to stop manufacturing its over-the-counter eye drops and other products until it corrects manufacturing deficiencies at its Benicia plant, according to an FDA statement.

The affected products include eye drops ("Oxydrops," "Bright Eyes," "Bright Eyes II," "Clarity Vision for Life," "Visitein," and "Can-C") and several analgesics.

The agency cited particularly that "the firm lacked manufacturing controls to ensure that its eye drops were sterile," and contended that the Visitein and Clarity Vision for Life eye-drops were unapproved drugs, and that three pain-relievers ("Biogesic," "Bio-Ice," and "Bio-Heat") provided inadequate label warnings.

Under the terms of the consent decree—submitted to the US District Court for the Eastern District of California—"MBI is enjoined from producing and distributing drugs until the firm corrects the manufacturing violations for its eye drops and its violations of the marketing approval and labeling requirements of the Federal Food, Drug, and Cosmetic Act."

–Douglas McCormick

VACCINE TECHNOLOGY

Chiron Looks to Flu Vaccine Cell Culture; FDA Gears Up

On Nov. 16, representatives from Chiron Corporation (Emeryville, CA, www.chiron.com) and Solvay Pharmaceuticals (Brussels, Belgium, www.solvay.com) addressed the US Food and Drug Administration's Vaccines and Related Biological Products Advisory Committee to support shifting influenza vaccine production from chicken eggs to canine kidney-cell cultures. FDA scientists supported the proposal, saying in briefing documents, "These cells offer significant advantages for routine influenza vaccine manufacturing, as well as being able to meet the unique challenges of pandemic vaccine manufacturing posed by virulent avian strain candidates," according to an Associated Press Report.

Flu Vaccine Lot Release, Dec. 13, 2005

Chicken-egg passaging has been the standard method of antiviral vaccine production for more than 60 years. Producing enough vaccine for a single season of immunizations in the United States requires some 80 million eggs and a process that must begin six months or more before the flu season starts. A switch to cell-culture systems could reduce the lead time from half a year to a few weeks, while shifting manufacturing into a much more tightly controlled process—a boon to vaccine makers who have suffered from batch contamination problems in traditional processes.

On Nov. 10, new FDA Commissioner Andrew C. von Eschenbach announced the appointments of Boris Lushniak and Jeffrey Shuren to co-chair the agency's Task Force on Pandemic Influenza. The Task Force will focus on promoting vaccine and antiviral production, and will involve members from 14 FDA centers and offices.

And, as of Dec. 13, FDA has approved the release of 158 batches of influenza vaccine for this flu season.

–Douglas McCormick

VACCINE TECHNOLOGY

Adjuvant for HPV Vaccine Enhances Immune Response Levels

Researchers from GlaxoSmithKline (GSK, Rixensart, Belgium, www.gsk.com) have shown that an investigational human papillomavirus (HPV) types 16 and 18 L1 vaccine formulated with a novel adjuvant can induce immune response levels that are higher in magnitude and persistence than formulations containing aluminum salt alone.

The adjuvant, AS04, is composed of aluminum salt and 3-deacylated monophosphoryl lipid A. HPV is the leading cause of cervical cancer, the second most common cancer in women worldwide. To provide long-term protection against HPV types 16 and 18, an effective virus-like particle (VLP)-based prophylactic vaccine must be formulated to induce a strong humoral and cellular immune response that persists for several years.

GSK researchers first conducted an in vitro study in culture cells (the human monocyte cell line U937 incubated with AS04). Results demonstrated AS04 was "associated with substantial and greater induction of TNF-alpha production compared with aluminum salt alone." (Tumor Necrosis Factor-alpha, or TF-alpha, is the key mediator of immunologic functions). Two other assessments involving vaccinations of human subjects showed that the investigational cervical cancer vaccine formulated with AS04 induced "substantially higher" levels of anti-VLP16 and 18 antibodies than formulations of aluminum salt only. Furthermore, the higher antibody responses associated with the AS04 formulation persisted for as long as 3.5 years postvaccination in human subjects.

The study was part a poster presentation at the American Association for Cancer Research International Conference on Frontiers in Cancer Research (www.aacr.org) in Baltimore, Maryland.

–Maribel Rios

GENERICS

GSK Study Questions Bioequivalency of Generic Cold Sore Creams

A recent study published in the International Journal of Pharmaceutics (1) finds wide variations in the bioequivalency of several generic topical acyclovir creams used to treat recurrent Herpes labialis.

The research team members, most of whom are from GlaxoSmithKline (GSK), studied 139 generic versions of GSK's "Zovirax" cream. Though Zovirax contains 40% propylene glycol, 111 of these creams contain less that 20% of antimicrobial preservative and solvent, according to the study data.

To test bioavailability, the group compared the innovator cream with two generic versions that each contained 15% propylene glycol. In addition, 10 generic creams that contained <15% of this ingredient were tested in an independent laboratory. All studies were conducted on human skin and the acyclovir creams were analyzed by liquid chromatography and mass spectroscopy.

According to the research team, the innovator drug delivered 7.5-fold more acyclovir than the generic "equivalents," which the study attributed to variations in the amount of propylene glycol.

The group's conclusion that the marketed, generic versions of the acyclovir creams are not bioequivalent to Zovirax bolsters the notion that a drug's formulation can influence its bioavailability, and thus its therapeutic bioequivalency. FDA requires that the innovator drug and the follow-on biologic must be therapeutically equivalent, which includes both bioequivalency and pharmaceutical equivalency (2).

References

1. L. Trottet, "Are All Aciclovir Cream Formulations Bioequivalent?" Int. J. Pharm. 304 (1–2), 63–71 (2005).

2. A.K. Bansal and V. Koradia, "The Role of Reverse Engineering in the Development of Generic Formulations," Pharm. Technol. 29 (8), 50–55 (2005).

–Kaylynn Chiarello-Ebner

VACCINE TECHNOLOGY

NIAID Boosts Vaccine Innovation but Draws Controversy

Vaccine start-up companies hoping for funding from the National Institutes of Health (NIH, www.nih.gov) may want to keep on the good side of Anthony S. Fauci, MD, director of the National Institute of Allergy and Infectious Diseases (NIAID). As reported earlier this week in The Wall Street Journal (Dec. 6), the director is granting $500–600 million per year to companies that can deliver on promising developments in novel vaccines.

The article reports that Fauci "draws on the vast scientific expertise within NIH to come up with products and companies worthy of funding," with the goal of preparing companies ready to bid on contracts under the BioShield program, currently run by the Department of Health and Human Services. The article also points out, however, that Fauci often grants funds to rival companies, including grants to both Sanofi-Aventis and Chiron for the development of a treatment against the H5N1 (avian flu) virus, thereby "pitting them against each other for federal contracts."

–Maribel Rios

CONSOLIDATION

American Pharmaceutical Partners to Merge with American BioScience

Injectable-drug maker American Pharmaceutical Partners (APP, Schaumburg, IL, www.appdrugs.com) has announced plans to merge with American BioScience Inc. (Santa Monica, CA, www.americanbiosciences.com), a privately held biotechnology company and APP's largest shareholder.

The merger will create Abraxis BioScience, which will hold worldwide ownership rights to "Abraxane," a marketed treatment for metastatic breast cancer and currently under development in more than 74 clinical trials to treat other types of cancer.

Abraxis BioScience also will inherit an extensive proprietary pipeline based on the commercially validated nanoparticle albumin bound ("nab") technology platform with six investigational new drug applications, including "Coroxane"—for peripheral vascular disease—in Phases II–III and nab docetaxel, which is expected to enter clinical trials next year.

Other core segments of the newly formed company include a well-established hospital-based injectables business and a broad injectables pipeline comprising more than 20 pending abbreviated new drug applications and 40 more in development. According to company reports, the manufacturing infrastructure will produce more than 200 million vials annually, with revenues expected to exceed $500 million this year.

–Maribel Rios

REGULATION

FDA Issues Warning

FDA notified physicians, nurses, medical technologists, pharmacists, and other healthcare professionals of the potential for life-threatening falsely elevated glucose readings in patients who have received parenteral products containing maltose or galactose, or oral xylose, and are subsequently tested using glucose dehydrogenase pyrroloquinolinequinone-based (GDH-PQQ) glucose-monitoring systems. There have been reports of the inappropriate administration of insulin and consequent life-threatening or fatal hypoglycemia in response to erroneous test results obtained from patients receiving parenteral products containing maltose.

REGULATION

FDA Warns Consumers Against Unapproved, Contaminated "Miracle II Neutralizer"

On Dec. 6, the US Food and Drug Administration warned consumers to avoid two unapproved, bacteria-contaminated products manufactured by Tedco, Inc. (West Monroe, LA, www.miracleii.biz): "Miracle II Neutralizer" (promoted as an eyewash for the treatment of cataracts and pink eye) and "Miracle II Neutralizer Gel" ("an incredible hygiene product used externally or for cleaning your teeth,"according to the company's Web site).

In its press statement, FDA warned that the "use of these products could pose a risk of serious adverse events such as infections, particularly in children, the elderly, and individuals with weakened immune systems who are particularly susceptible to illness."

The statement quoted Margaret O'K. Glavin, FDA's associate commissioner for regulatory affairs, who said, "We will not tolerate the marketing of products that use deceptive and untruthful claims to lure consumers into potentially dangerous situations. We consider it a significant public health hazard when consumers are deliberately deceived into using potentially dangerous products that promise health benefits but deliver only risk of harm."

According to FDA, Tedco markets Miracle II Neutralizer for a raft of unapproved uses, including the treatment of AIDS, cancer, Crohn's Disease, dermatitis, diaper rash, diabetes, ear ache, hemorrhoids, hives, gout, herpes, mouth ulcers, psoriasis, skin cancer, and yeast infection, including claims like, "Supreme technology has made possible for a perfect soap cleaner, deodorizer, natural insecticide, and antibacterial product to be put on the market. This is the only product that is made in the world that can wash a newborn baby or clean up an oil spill and everything in between."

Tedco lists the ingredients as "energized stabilized oxygenated water, ash of Dedecyl solution, calcium, potassium, magnesium." It sells its products online (where they were still being sold as of Dec. 8) and through retail outlets.

In July 2003, FDA sent Tedco a Warning Letter, calling the product an unapproved drug.

–Douglas McCormick